ISLAMABAD: Even after the approval given by Prime Minister Imran Khan twice, the 2020-25 Textile Policy approval is still sluggish as many important economy ministers, the Special Assistant to PM (SAPM) shows defiance by opposing dental and policy policies. aptly, the top official source with knowledge of the development’s secrets told The News.
“The Ministry of Trade has put Textile Policy on the ECC agenda many times, but some ECC members are not ready to agree on a Textile Policy which guarantees electricity rates of 7.5 cents per unit for five years and an RLNG supply of $ 6.5 per MMBTU. The same members played an important role on the Cabinet Committee for Energy (CCOE) in making the decision to cut off gas supply to the capture power plant (CPP) intended for the export industry from March 1, 2021. “
This means that starting March 1, 2021, no local and imported gas will be available for the export sector and the 7.5 cents electricity tariff mentioned in the 2020-25 textile policy which also received approval from the prime minister is now being rejected. “Now the export sector has to rely solely on unexpected electricity from the national grid at 9 cents per unit from March 1 onwards.”
According to official sources, Advisor to the Prime Minister of Trade and Investment Abdul Razak Dawood has reportedly been left out by several economic ministers in various ECC meetings. They pleaded that the export sector had a big incentive and under that incentive, the export industry got electricity from the national grid at 9 cents per unit.
Plagued by severe opposition, the sources said that Razak Dawood had decided to tell the prime minister that he faced a lot of opposition to the textile policy and he would not take him to the ECC until the PM chaired a meeting on the matter.
Dawood’s guess, said the source, is that the export industry will lose its market if it continues to be deprived of regional electricity and gas tariffs, which are given to industrial sectors in India, Bangladesh and Vietnam. The country’s recent surge in exports will subside if the textile policy is not approved.
“Dawood seems worried saying that the newly escalating industrialization process at home will subside. And if that happens, it will be a great tragedy, “the source said, quoting the trade adviser.
“The demand for 7.5 cents per unit of electricity tariffs stated in the proposed 2020-25 Textile Policy cannot be accepted by several ministers. A top minister was also reported to have overstepped the limit, saying that businessmen enjoy a luxurious life in spacious villas. This shows the minister’s particular type of resentment towards the business community. “
Shahid Sattar, Executive Director of the All Pakistan Mills Association (APTMA), when contacted, criticized the government for cutting off gas supplies to the export sector starting March 1, 2021 on the grounds that the energy ministry’s move would prove to be detrimental to industrial activities which have recently increased momentum, while the RLNG moratorium and The supply of local gas to the power plant will cause a 50 percent increase in production costs as export products in the international market are no longer competitive. This will result in a decrease in the country’s exports.
Sattar said that the export industry is in the process of expansion and the country is now heading towards industrialization, which was in a de-industrialization mode about two and a half years ago and more importantly the industry is now starting to import high power plants. efficiency, but unfortunately the government will impose a gas ban for captive power generation.
He also argues that electric power generation is indispensable for the export industry because the electricity generated from the CPP does not fluctuate, which is very important for fine textile machinery. However, he said the electricity coming from the national grid was not in accordance with the quality required by the textile industry, on the grounds that the national grid electricity fluctuated too much, so production suffered greatly. He also referred to the NEPRA report which also mentions one fluctuation causing 4-5 hours of closing of textile product production.
He further argued by saying that given the past performance of the electricity sector and frequent breakdowns and variations, the industry did not have confidence that the electricity sector would be able to provide sustainable stability and competitiveness.
Sattar explained, the latest machines used in industry are equipped with electronic devices (electronic cards / chips) which are very sensitive to electrical fluctuations. The card or chip installed in the machine catches fire or trips if there are variations in frequency / voltage / power supply, stopping the entire production line. Industry experience in utilizing grid electricity has not been productive so far.
Apart from production losses, the capacity and performance of the machines installed are also affected, he said, adding to further maintenance and repair costs. Losses in production and investment in addition to production losses will jeopardize the industry and ultimately Pakistan’s credibility in executing orders; there will be negative consequences from the decline in exports, unemployment and losses on investments that have been made. The negative impact of the gas supply moratorium would be much greater than providing 150 MMCFD of natural gas for use in the power sector.
Sattar also said that a large number of factories have recently invested millions of rupees in new gas / RLNG generating equipment based on efficiency criteria that the government complies with. Sudden and misunderstood policy changes will bankrupt these companies
“The factory has started receiving calls from banks to verify how they will fulfill orders based on the gas / RLNG supply and repayment facilities requested,” he said.