FAISALABAD: Textile exporters have threatened to shut down their units and start protest from next week if Regionally Competitive Energy Rates (RCER) were withdrawn from March 1, said Muhammad Amjad Khawaja Senior Vice Chairman Pakistan Hosiery Manufacturers Association (PHMA).
Addressing a press conference under the banner of All Pakistan Textile Associations Faisalabad, he said that the industrial sector was experiencing continuous crisis for the last many years.
Commenting on the current negotiation between the Government and IMF, he said that the energy crisis coupled with an exorbitant increase in gas and electricity rates and unpredictable exchange rate has pushed the export sector to the verge of collapse. He said that we have been explaining our view point on these issues but the government remained adamant.
He said that most of the units are working with fifty percent installed capacity while unemployment has made the lives of workers miserable. He said that workers are actually part of their families and they could not remain aloof from their hardships due to the skyrocketing inflation.
He said that exporters want RCER to survive in the international markets and earn precious foreign exchange for the country. He said that exporters are not demanding any subsidy which is being misinterpreted by the government. He said that the government was fully convinced and was extending regionally competitive energy rates but now under the grab of an IMF tranche of $1.5bn this facility is being withdrawn from March 01.
He said that it would be tantamount to kill the golden egg laying hen and added that the government was badly implicated in the political affairs and has failed to understand the core issues of the masses.
He said that before regime change the Pakistani exports were 32 billion dollars with a lion’s share of $24bn of the textile sector. He said that unluckily, now the total exports have dwindled down to 19.5bn. Similarly, the garments sector, which was making tremendous progress, is now showing negative growth. He said that it seems that the government is intentionally pushing the country and exports towards the closed alley.
Dr. Khurram Tariq, President Faisalabad Chamber of Commerce & Industry (FCCI) strongly contradicted the notion that IMF has directed to enhance the gas and electricity tariff.
He said that their demand is very genuine to ensure a hundred percent recovery from the power sector with minimal transmission and dispatch losses. He said that currently recovery of one trillion is pending which is increasing with every passing day. He said that government high-ups have no tangible reply except terming it “political economy”.
He said that actually the pilferage amount is now being recovered from the law-abiding citizen and the industrialists who are responsibly discharging their due liabilities.
He further said that during the first seven months of the current fiscal, electricity to the tune of 380bn have been stolen which is expected to jump to 520bn by the end of this financial year. Quoting the annual report of NEPRA, he said that the line losses of FESCO are minimum, while in case of PESCO it is 38%. He said that the export sector is getting electricity at Rs. 20 per unit which would jump to Rs. 40 after the withdrawal of this facility. Similarly, Sindh is getting gas at $4.5 per mmbtu while in Punjab it is being provided at $9. He said that some elements try to cover up this anomaly under the 18th amendment but it is very clear that it relates to the right of use and not to the price fixation of gas.
He said that Miftah Ismail had chalked out a plan to eliminate the circular debt but this is still pending for the approval of cabinet. He further said that exporters are facing a liquidity crunch due to high rates of electricity and gas.
He said that the government has enhanced sale tax from 17 to 18% and its refunds are also being delayed. He said that most of the exporters have not yet received the refunds of Rs. 4bn pertaining to the month of September last. Similarly, their DLTL refunds are also pending which has squeezed their working capital. He said that no doubt some issues are new and many are old but it is actually a matter of management and governance to efficiently resolve the issues.
Arif Ihsan Malik, former Chairman APBUMA, said that every government encourages its export sector and hence RCER are imperative for Pakistan so that our exporters could also compete with their business rivals from India, China, Bangladesh, Cambodia and Vietnam. He said that our year-on-year exports are decreasing at the rate of 15% which has shattered our economic and social fabric. He said that due to inclement circumstances, most of units are working with only 40% of their installed capacity and warned that if energy rates were enhanced 75% textile units would be closed down. He said that Pakistan has 50% black or undocumented economy and government intends to add further burden on the existing taxpayers.
He demanded that it is the sheer failure of the commerce minister and he must resign and exporters should only accept negotiation offer from the ministry of finance. He said that first protest sittings would be held at Kashmir underpass after one week followed by similar protests in different parts of the city if their demands were not accepted.
Mian Kashif Zia, Mian Farrukh Iqbal and Syed Zia Alumdar Hussain also addressed the press conference which was followed by a question answer session. Rana Altaf Ahmad, Ch Mohsin, Hazar Khan and other members also attended this meeting.
Copyright Business Recorder, 2023
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