KCCI Press Release

PM appealed to take back decisions to raise electricity tariff, closedown captive power plants

PR No.: PR-/68
Released On: January 23, 2021
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Islamic Date: Jamadi ul Sani 09, 1442 A.H.

KARACHI: Chairman Businessmen Group (BMG) & Former President Karachi Chamber of Commerce & Industry (KCCI) Zubair Motiwala,  President KCCI Shariq Vohra and Chairman Pakistan Apparel Forum Muhammad Jawed Bilwani have appealed Prime Minister Imran Khan and his economic aides to take back the totally unwise and ill-timed decisions to raise electricity tariff by 15 percent and closedown captive power plants which would not only have a devastating impact on the export-oriented industries but would also terribly disturb the local production of general industries, besides sabotaging all the efforts being made by the government to enhance the exports.Reacting to relevant news items carrying the government’s decisions to raise electricity tariff and shut down captive power plants by discontinuing gas supplies, they said that this was not the right time to impose such anti-business and anti-exports decisions as the exports, particularly the textile exports, have started picking up some pace and the exporters have booked substantial number of orders. “Such decisions terribly affect our image as the buyers sitting abroad become dubious that whether we will be able to fulfill our delivery commitment on time or not”, they added.They opined that the announcement by the Government representatives was immature and technically out of place.  Such statement has just created anarchy and was against the national interest. The industries of Karachi are highly aggrieved and have conveyed their concern on the one-sided decision of the Government through its ECC of Cabinet, taken without consultation with the stakeholders. The industries have communicated to KCCI that their fundamental right guaranteed by the constitution must not be usurped and it is the industrial lawful right to get the gas for their captive power plants of to operate their industries. If the gas is discontinued one-sidedly, the industrialists reserve their legitimate right to invoke Article 199 of the constitution and approach the court of law to safeguard their lawful rights and legitimate businesses, as revealed during the Press Conference of Asad Umer, Tabish Gohar and others.  The Government representatives in the Press briefing have announced for unwarranted supply of gas to K-Electric at the cost of destruction of industries of Karachi is highly condemnable and rejected.They said that the decision to suspend gas supply and enhance electricity tariff affects the performance of general industries which are an important part of the supply chain of export-oriented industries hence, the general industries in one way or the other participate in the export activities. Consequently, it will also have very devastating trickledown effect on the trading, wholesale and retail networks which will ultimately create a total chaos and uncertainty.They firmly believed that the electricity tariff hike and closure of captive power plants would tarnish the Government’s export friendly policies and put a deathblow on the exports, foreign exchange earnings and the most labor-intensive sector. “The government must realize that these decisions would only favor our competitors from India and Bangladesh who will take advantage of the situation by attempting to somehow get all the orders achieved by Pakistani exporters shifted to respective countries”, they added.It was recalled that the industries had installed captive power plants of gas to generate electricity on the strong recommendations of EPB (now TDAP) in the wake of severe energy crisis at that time almost two decades back, when KE was not privatized, and the industries were not getting the required quantum of electricity and hence were using diesel generators to produce their own electricity which was costly increasing the cost of export production pushing towards un-competitiveness. In that outlook it was compulsion of the industries to manage themselves and make arrangements for their own power generation for survival. It is a proven fact that the Industrial Consumer runs its captive power generation plants on maximum efficiency in order to meet the costs of the production which are Combined Cycle Plants and generates steam, hot water etc. However, the power plants of utility company are inefficient and obsolete models and technology.The Government has to decide whether it is in the larger interest of the country and Karachi to deprive the more than 4,500 domestic industries of Karachi from gas which they rightfully deserve or to undue favor KE a single private entity of foreign origin? The Government shall be held responsible for all the losses of the industries of Karachi and layoffs, colossal financial losses of industrialists, loss of revenue which will create uncertainty, chaos and law and order situation.When gas was discovered in the country, the industries were the first / pioneer gas customers while it is an irony that the industries of Karachi has been continuously victimized and their deserving share of gas was also been given to K-Electric in the past. The industries highly deplored and condemn as to why the Government closed eyes and allowed K-Electric to install plants to produce electricity from gas without signing any GSA in the past and it is matter of fact that the country has been facing acute shortage of gas for the last 10-15 years. It is a matter of deep concern that on one hand the Government has placed embargo on new industrial gas connection since 2011 while on the other hand the government is providing domestic gas connections and has also given gas to KE without signing any GSA which is contradictory and discriminatory. Industries lamented the sad state of affairs that they generate huge revenue the Government and earn valuable foreign exchange through exports are deprived of gas while the K-Electric which drains the foreign exchange outside Pakistan is getting complete support and unjustifiable favors of the Government. The Industries of Karachi see this deliberate move of K-Electric purportedly in collusion with some elements in the previous Governments in order to destroy the industries of Karachi and to ultimately sabotage the economy of Pakistan.

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