Pakistan Tanners Association concerned at DISCOs’ demand to increase security deposit

KARACHI: Chairman, Pakistan Tanners Association (PTA), Hamid Arshad Zahur has expressed deep concern at the proposed demand of Distribution Companies (DISCOs) to increase the security deposit charges by 2600% which is unrealistic and unbearable by the export oriented industries of the country.

Hamid Zahur also shared the current difficulties faced by the industry due to higher taxation and energy costs, making us uncompetitive against neighbouring countries, such as India, Bangladesh, Vietnam etc.

The proposed increase in security deposit from Rs. 2,010/kW to Rs. 54,783/kW will lead to a severe cash flow problem for the industry. Instead of increasing our businesses and investing in working capital and machinery for increased exports, industries will only be financing the DISCOS, who are in the current situation just because of their own inefficiencies.

Some key points identified are as follows:

• Excessive and Unutilized Security Deposits – DISCOs already hold billions in security deposits, far exceeding actual requirements. Increasing these deposits is both unjustified and exploitative.

• Declining Electricity Consumption – Rising tariffs are already reducing electricity demand. Additional security deposit requirements will further discourage new and existing connections.

• Inefficiencies in Revenue Collection – Instead of improving collection mechanisms, DISCOs are unfairly shifting financial risks onto consumers.

• Existing Legal Safeguards – Property ownership verification and legal frameworks already secure DISCOs’ dues, making additional financial guarantees unnecessary.

• Negative Impact on Industry and Economic Growth – Higher security deposits will deter industrial expansion, directly contradicting Government initiatives for economic revival.

• Arbitrary and Unjustified Policy Proposals – The suggested deposit structures, such as requiring 2.5 months’ average billing for non-domestic consumers, lack transparency and logical justification.

He appealed to the Federal Minister of Energy, Awais A. Khan Leghari, Special Assistant to the PM, Muhammad Ali as well as Chairman NEPRA Waseem Mukhtar to look into this matter for the proposed increase in security charges from the export oriented leather Industry, which will negatively impact the growth of the industries at large.

Copyright Business Recorder, 2025