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Industrialists, traders join forces to thwart gas suspension plan

By Javed Mirza
January 26, 2021

KARACHI: Industrialists and traders joined forces to voice concerns on Monday over the government’s decision to suspend gas supply to industries without making any alternative arrangement.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Employers Federation of Pakistan, Karachi Chamber of Commerce and Industry (KCCI), and other trade bodies from across the country held a joint press conference at the FPCCI House to condemn the government’s decision to suspend gas supply to general industry from February 1 and to export-oriented industry from March 1.

“Closing gas supply to industries means closing of industry,” said Zubair Motiwala, chairman of Businessmen Group (BMG). “If government wants this it should be ready for unrest and anarchy.”

Motiwala said power distribution companies lack infrastructure to provide additional electricity to industrial units once they shut down their captive power plants (CPP) on gas unavailability. Motiwala said the decision has sent a ‘very bad’ message across the world.

“Buyers in the US and European Union are now asking us whether or not we will be able to make deliveries in the second quarter,” he said. “Uncertain of our ability to meet the delivery dates, they are asking us to divert the orders.”

BMG chairman said the distribution companies and K-Electric don’t have capacity to meet additional demand from industries. “There are around 1,100 units running on CPPs and there is no infrastructure to supply electricity to most of these units. Such an infrastructure comprising transmission lines and grid stations will require billions of dollars and at least 3 years to complete,” he said.

Nasir Hayat, president of the FPCCI termed the government’s decision as a conspiracy against the country’s overall industry. “Utilities are the first input for any industry, and suspending gas supply to the industry will have a devastating impact on employment, exports, revenue collection and the economy as a whole,” said Hayat. “Whenever the industry and exports take off, the government does something to derail the process. I wonder whether government wants the industry to run in the country or not.”

He said most of the industries are running on natural gas using boilers and regeneration system and it is impossible to be converted on the grid and change the whole appliances within one month.

FPCCI president said the CPPs are generating electricity efficiently and the grid could not match “our cost of electricity production”. “CPPs are generating power at Rs10/kilowatt-hour, while the government wants to buy Rs10/kwh. This would increase cost of production leaving local produce uncompetitive in the international market,” he said.

The business leaders are unanimous that government is taking unilateral decisions, which they said are delusional. The press conference was informed that the previous government had signed agreement with independent power producers in dollar terms when dollar was lower at nearly at Rs90 while now it is Rs160 due to depreciation, which is also causing losses.

Shariq Vohra, president of KCCI said the decision to suspend gas is a conspiracy against Karachi. “We won’t let that happen,” said Vohra. “Over 30 percent of the industrial units in Karachi do not have access to grid electricity, and K-Electric does not have the capacity to provide reliable supply.”

The businessmen said the government is unable to control the unaccounted for gas, which is hovering at 15 percent, but they are taking decisions to destroy the industry. They demanded of the Prime Minister Imran Khan to withdraw this decision forthwith. “We do not want confrontation with the authorities, but they are pushing us there,” said Ismail Suttar, chairman of Employers Federation of Pakistan.