Hamid Zaman, the Chairman of All Pakistan Textile Mills Association (APTMA) North Zone, while speaking at the post budget press conference in Lahore said that if the government does not allow a Regional Competitive Energy Tariff (RCET), the textile industry can face the worst effects, causing the vast closure of industry and consequently big unemployment.?
Senior Vice President of APTMA Kamran Arshad, Vice Chairman Asad Shafi, Secretary General Raza Baqir and other senior officials of Association were also present in the conference. He refered to the National Electric Regulatory Authority (NEPRA) which estimated the actual cost of electricity at Rs.23/kWh for B3 and B4 consumers.
He said that this cost escalates to over Rs.40/kWh when factoring in cross-subsidies, capacity payments to Independent Power Producers (IPP), line losses, power theft and other charges. He said that it would be unfair to burden the export industry which already achieves a 100 percent recovery rate for its bills and experiences zero losses with the costs resulting from such inefficiencies and mismanagement. He said that the rates of electricity in Pakistan are much higher than its rates in neighboring countries.
The Chairman of APTMA, North Zone also referred to a study, done by the Pakistan Institute of Development Economics, (PIDE) which says about the potential deindustrialization of Punjab if Regionally Competitive Energy Tariff is withdrawn.
According to the research of PIDE, there could be dire consequences like layoffs, reduced investment, declining exports, decreased profit margin and overall decline in the industrial output.
He further said that the textile sector has earned $16 billion through export this year against the target of $25 billion while the country earned $19.3 billion foreign exchange through the textile industry when the government had supported us in the previous year.
He assured that RCET would facilitate to increase the textile exports to $50 billion during the next five years. He concluded that 30 percent of Punjabs textile industry has already been closed partially.