Pakistan Hosiery Manufacturers & Exporters Association (PHMA) North Zone Chairman Abdul Hameed has denounced the government plan to withdraw gas supply to co-generation captive power and captive power plants, leading to catastrophic consequences not only for the industry but also for the overall economy.
In a letter, written to Prime Minister Shehbaz Sharif, Abdul Hameed asked to take immediate cognizance of the aggravated situation and rescue the export-industries, as it has invested billions of rupees in co-generation equipment and captive power machines which will be rendered useless if gas supply is withdrawn.
“This will not only lead to colossal financial loss but also waste the valuable resources spent on the establishment of these facilities,” he added in the letter.
Abdul Hameed said that the withdrawal of gas supply will force the industry to rely on expensive electricity, raising production cost and rendering them uncompetitive in the international market. This will read to a significant setback for the industry, he added.
The NZ Chairman further stated that our economy is passing through a very crucial time and we should jointly work for the growth of our economy particularly for the export sectors of Pakistan.
He said that the value-added knitwear exporters stood with the government to surpass its revenue generation target despite all odds but the government should come forward with compressive planning and facilitate the exporters so that they can play their significant role effectively for the growth of the economy as well as collection valuable foreign exchange for the country as well.
He further said that the export-oriented sectors already pay higher cost of utilities as compared to the regional countries and electricity from the grid is more expensive as compared to captive power. The industry is taking gas on very high rate as compared to power producers. He further added that due to load shedding in the past, the government granted permission to establish captive power plants and the entities invested huge capital on it and it may be wasted.
Our competitors are producing their exportable goods at low cost and the international buyers are more interested to buy there required goods rather than Pakistan, as our electricity is expensive due to cross subsidy, he added in the letter.
Abdul Hameed said that one of the main problems in the energy sector is inefficient allocation of energy sources through pricing and policy anomalies. Over the last decade, when the power load shedding was on a higher side, industries moved towards captive power production – on furnace oil, diesel, and gas. Later, when new capacities were added on imported fuel, no heed was paid to moving the captive plants back to the system.
Captive power generation has lot of benefits for the export industry and most entities are producing co-generation from captive power which ultimately reduces the consumption of gas into the boiler. The captive power plant is a very good source of smooth power supply for the manufacturing goods and they are neither facing load shedding nor disruption due to technical faults. It is also cheap and clean power generation for their production units and Pakistan manufactured goods become more cost effective in the international market.
He also added that the earlier the government had granted huge number of permits for the establishment of CNG stations without the authentic study and wasted precious energy.
Now, once again the government is going to disrupt the captive power generation system and the huge share of export may also be destroyed in the export sectors as well. He suggested the government managers to provide consultancy to the private sector to improve the efficiency of captive power generation.