KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Iftikhar Ahmed Sheikh, while expressing deep concerns over rising cost of doing business due to unbearable hike in energy tariffs, feared that the day was not far when thousands of jobless people would come out on streets to protest against the government’s policy to keep on raising gas and electricity tariffs which have resulted in closure of hundreds of industrial units as well as small & medium enterprises not only in Karachi but all around the country.
“Although various stakeholders including KCCI have been strongly protesting against the unbearable and unabsorbable hike in gas and electricity tariffs but instead of providing relief, the policy makers are not paying any attention to the alarming situation which would have a devastating impact on the economy due to shrinking production activities, depleting exports and rising unemployment”, he added in a statement issued on Friday.
Iftikhar Sheikh stated that despite assurances by Energy Minister and others, not a single step has been taken to somehow reduce the cost of doing business which has terribly shattered the confidence of industrialists who were now seriously looking forward to shift their production units somewhere else where they could peacefully carry on their businesses in a conducive environment.
“We don’t need to go far as countries in our neighborhood are offering us to set up units within their respective Special Economic Zones (SEZs) where they assure availability of all industrial inputs, particularly gas and electricity at affordable rates with a guarantee to keep energy tariffs intact for a period of 10 years which would obviously help the industrialists in devising future plan of action by keeping the overall cost in mind but unfortunately, in Pakistan, we absolutely have no idea of what is going to be the cost next month due to rising energy tariffs”, he said, adding that although many industrialists have still not become completely hopeless but if the situation was not promptly addressed, they would certainly leave Pakistan and it would be next to impossible to bring such dismayed businessmen back to the country.
He said that on one hand, the Special Investment Facilitation Council (SIFC) was making all out efforts from pillar to post and assuring an enabling business environment but on the other, there was no stopping to the unconstitutional and unbridled decisions taken by the Caretaker government which has acted beyond its ambit by giving go ahead to highest increase in gas and electricity tariffs which has neither been done by any democratically elected government nor under any martial law. “We fear that all initiatives taken by SIFC to somehow keep the economy afloat will go wasted, if remedial steps are not taken immediately to bring down the cost of doing business by announcing drastic reduction in gas and electricity tariffs”, he added.
He said that the government continues to keep on enhancing gas and electricity tariffs yet the circular debt has spiraled alarmingly to a record Rs5.73 trillion purely due to government’s inefficiency to deal with theft and line losses in both, gas and electricity sectors. “The government wants to shrink circular debt but this is being done by staking the industries as raising energy tariffs continuously would plunge the commercial and industrial consumers into severe debts which is going to create a disastrous situation for everyone.”
He also pointed out that electricity was being provided by KE at the rate of $0.18 per KWh which was too high as compared to regional competitors like India, Bangladesh and Vietnam who are providing electricity at $0.04, $0.07 and $0.06 per KWh respectively. “Similarly, the gas tariff for export-oriented industries has also risen from Rs852 per MMBtu in December 2022 to Rs2750 per MMBtu in February 2024, indicating a back-breaking hike of 223 percent and for General Industries, gas tariff has been enhanced from Rs1054 per MMBtu in December 2022 to Rs2150 per MMBtu in February 2024, indicating an increase of 104 percent”, he noted, asking that how could general as well as export industries survive in this scenario?
To provide immediate relief, the first and foremost steps should to immediately fulfill the commitments of releasing the already earmarked Rs7 billion against previous incremental consumption package whereas arrangements must also be made to release the remaining Rs21 billion as a total of Rs28 billion were pending on incremental consumption of Karachi-based industries since long. “It is highly unfair that funds under this package have been issued to rest of Pakistan except Karachi which is a sheer discrimination to the largest city of the country which contributes more than 68 percent revenue to the national exchequer and around 54 percent in terms of exports.”
He stressed that the government must also implement its decision to allow power tariff at the rate of 9 cents/KWh to industrial consumers of Karachi, which has been confirmed time and again by the energy minister at various platforms but stands unimplemented to date.
Keeping in view the matchless contribution being made by Karachi city in the economic development of entire Pakistan, Iftikhar Sheikh stressed that it was really important to address the concerns of Karachi-based industries and demonstrate a commitment to fostering an environment of equal opportunity and support but this was not happening at all as Karachi continues to face step-motherly treatment from the federation. “We hope that the lawmakers in Islamabad would realize the gravity of situation and immediately take steps to save industries from closing down forever”, he added.
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