Textile industry cannot afford high power tariff

Expensive electricity is not helping textile industry

Prime Minister Imran Khan promised to provide cheap electricity to textile industry after taking power in 2018 and ECC and cabinet vide SRO 12 of January 1, 2019 notified the same. But textile industry is still getting expensive electricity. PTI government promised to provide electricity at the rate of 7.5 cents per unit but this industry is still paying 13 cents per unit.

The high tariff is hurting the textile industry. The expensive electricity-high transportation expenses mean expensive products which are not helping the local textile industry to compete in the international market. High tariff is also making industry vulnerable enough not to grab the opportunity created in world market because of China shutdown.

If the tariff of 13 cents per unit continues to appear in bills then there is fear that the process of de-industrialisation may start, triggering massive unemployment and unrest in the country. The Executive Director All Pakistan Textile Mills Association (APTMA) Shahid Sattar has written a letter to Abdul Razak Dawood, Adviser to Prime Minister on Commerce, Textile, Industries and Production and Investment and expresses the concerns of textile industry.

According to a copy of the letter, APTMA mentioned that Indian Textile Secretary Ravi Kapoor had called for the textile industry of India to rally and grab the opportunity created by the shutdown in China. In this connection, the government of India is extending all possible support to the industry to capture much of the estimated $20 billion market that has opened up. Bangladesh and Vietnam are similarly gearing up.

Unfortunately-in Pakistan, the confidence of the industry and investors has been shattered by the Power Division’s move to impose additional costs or surcharges over above the all-inclusive 7.5 cents per unit approved by the ECC and cabinet vide SRO 12 of January 1, 2019.

Further clarification that the 7.5 cents per unit was all inclusive was given on February 8, 2019 and March 29, 2019. APTMA, in its communication to Dawood, said that the intent of regionally competitive energy tariff is being nullified by the Power Division’s letter dated February 10, 2020, which has resulted in billing of these unjustified arrears from January 2019.

Pakistan’s textile sector is currently operating at near full capacity and directly in need of fresh investments for modernisation, expansion and new projects in order to meet export orders.

The APTMA letter says that as result of the short-sightedness of the Power Division-even the currently operating companies are likely to go out of business, leaving millions workers direct and indirect out of work. “This will surely cause civil unrest dues to the sharp increase in unemployment.”

 “If the Power Division’s ill-advised about turn on the matter of the all-inclusive 7.5 cents per unit electricity tariff for export sectors is not corrected, we will not only lose this once in a life time opportunity for enhancing exports but also head towards premature de-industrialisation, massive unemployment, a precipitate falls in exports,” further says the APTMA letter.

                                                           Rukhsana Manzoor Deputy Editor