KARACHI: The federation of Pakistan Chamber of Commerce and Industry (FPCCI) has urged the federal government to immediately review the power agreements with IPPs to save the country’s sinking industry as electricity tariff is unbearable due to capacity charges of IPPs.
Addressing a press conference at Federation House on Monday of acting President FPCCI Saquib Fayyaz Magoon along with S M Tanveer Patron-in-Chief UBG and other industrialists, said that presently, energy prices or tariff is the one the major and biggest problem in the country and directly hurting the industrialization in the country. “We have made it clear to the government that the industry cannot run until the energy prices not reduced”, he added.
He said that FPCCI in its budget proposals urged the government for reduction in the power tariff to make the domestic industry competitive in the world market; however, instead of reduction in electricity prices, the government has imposed fixed charges of Rs.1250, which has increased the cost of production.
BMP for revisiting power purchase contracts with a view to reducing energy cost
He informed that as against the capacity of 45,000 MW, only 22,000 MW comes in the main transmission line, but the consumers have also to pay the cost of unutilised electricity. “We have to pay 56 percent of the price in capacity charges due to unjustified contracts with IPPs”, he mentioned.
FPCCI on behalf of the entire business community’s demanded that the government should review the agreements awarded to IPPs, otherwise the industry will not be able to compete and survive.
On the occasion S M Tanveer said that currently, the government is paying Rs 2 trillion on account of capacity charges. “The government must decide that it want to save 40 people’s or 240 million Pakistani masses”, he questioned.
Industry is unable to keep the factory operational at this power tariff and started shutting down operations, he said. “Some 25 percent of industry has already shutdown due to high tariff and hundreds are in line to close the operation”, he added.
Tanveer warned that this crisis will lead to increase the unemployment in the country and mass decline in the country’s exports. This will also resulted in lower tax revenue, he added.
Revision of power tariff is a matter of urgency and the government must take immediate action to addresses this issue, otherwise once industry closes, can’t be revived. Business community is committed to support the country and the government to achieve a long-term growth and bring the $100 billion by end or 2030, but this needs to addresses the issues like power tariff to reduce the cost of production so our industry can compete in the international market, Tanveer said.
He urged the government to revise the contracts of IPPs and conduct Forensic audit of IPPs by international firm in next two weeks to save the country’s industry. “If the IPPs do not agree for revision and audit, their names should be included in the ECL”, FPCCI demanded.
He said that due to this situation new investment in the industry sector is come to standstill.
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