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September 21, 2019

SIE: How 19,000 new jobs remain hostage to paper-shuffling mafia


September 21, 2019

LAHORE: More than 19,000 jobs in private sector remain unfilled in 131 new state-of-the-art medium-sized industries because of unavailability of power at Sundar Industrial Estate (SIE), Lahore, which betrays the level of government’s seriousness in job creation.

It is worth noting that SIE is a modern industrial estate in Punjab that still attracts investors when the industrial activities are at their lowest ebb in the past two decades.

The SIE is managed under public-private partnership with its board dominated by private sector directors. The power supplied by the power distribution company is hardly adequate to fulfill the requirements of already operating industries.

There is a huge pipeline of industrial projects in different stages of completion. Currently 131 projects are ready for production and another 150 would gradually be ready for production in the next 12 months.

Our industrial sector is plagued with aging inefficient industries. The 131 fully functional but inoperative industries have commissioned new modern machines in different sectors from light engineering, pharmaceuticals, and auto parts to textiles and leather. Many of these industries stand strong chances of exporting their products and quite a few were planned to substitute imports.

A conservative estimate is the industries waiting for power supply would provide employment to at least 19,000 works at an average of 150 per industry. Some may hire double or triple this average.

It looks odd that there is shortage of industrial power in Lahore when there is surplus power in the national grid. A probe into the matter revealed that when the SIE was launched it was estimated that at full colonisation it would need constant supply of 210MW. In 2004, the power distribution company agreed with Sundar administration the estate would need a new transmission line at an estimated cost of Rs160 million.

The estate deposited the amount in the power supplier’s account. The records show the issue of ‘right of way’ for laying the transmission line was also settled. In the meantime the first 40MW transformer was activated by the power utility from the then existing transmission lines and it was sufficient for the needs of commissioned industries at that time.

The issue of installing new transmission line was still pending when some other industries were commissioned. The power company again energised another 40MW transformer from the existing transmission line. As the colonisation in the industrial estate increased, one more 40MW transformer was set up there. By this time the issue of new transmission had ended up in cold storage.

Some six months back the industrial estate again asked the utility to energise its fourth 40 MW transformer, but was told that existing transmission lines were loaded to the limit and further power could not be supplied before erecting new transmission lines. The company demanded an additional amount to Rs460 million to lay this line.

Now there is a dispute between the supplier and the industrial estate. A document available with The News shows the cost of laying the transmission line with clear ‘right of way’ in 2004. And the cost escalation contended by the suppliers cannot be passed on to the industrial estate.

The supplier may have a point that its current transmission lines are loaded as per given standard. Power experts point out that the power company has, in numerous instances, loaded its lines up to 85 percent of installed capacity and in few instances (in posh areas) up to 95 percent of installed capacity. They say in view of 19,000 jobs at stake the company for the time being should energise the industrial transformer.

Experts further said the load on power lines declines appreciably during winter that’s drawing near. During the five winter months, the dispute of payment for transmission line should be resolved either through courts or arbitration, they added.

The economic managers should take this issue seriously because denying industry power when it’s in excess is holding economic productivity and job growth hostage. Incidentally both the adviser to the Prime Minister on commerce and industry and Punjab minister for industries belong to Lahore. They both know the issue and should take it up with secretary power or minister water and power to pave the way for assured creation of 19,000 jobs and turn job mirage in to reality.