The proposed shortage of Sui gas during the winter season has worried the textile millers, who feared further shutdowns. The Sui Northern Gas Company Limited (SNGPL) is likely to start cutting its supply to commercial and domestic consumers in December.
"It was announced by the SNGPL authorities last year that 40 percent more gas shortage is expected in 2008," said former Chairman of All Pakistan Textile Mills Association (APTMA), Punjab, Adil Mehmood.
He said that the industry, 50 percent of which is already in trouble, would have to witness further shut downs if the SNGPL went ahead with its plans. It may be noted that the textile millers have been criticising the SNGPL for heavy load shedding in the industry with the start of winter every year.
The SNGPL officials, on the other hand, have been reminding the industry about the signing of their contracts with the company, highlighting the "no objection" clause in case the company is introducing loads shedding of the gas as and when required.
The power plants, installed by the industry are highly dependent on the supply of Sui gas and a reduction in supply of it leaves the textile millers with no option but to close down their operations.
The textile industry is already passing through tough time, as according to the industry sources, the banks are not renewing their credit limits and the millers have no credit to purchase cotton despite a the prevailing dwindling trend in its prices. It is becoming difficult for the industry to pay mark up on the loans it has already taken from the banks.
"The cost of finance has triggered to 17 percent from the level of 4.5 percent and another increase of three percent will push industry again to the era of 20 percent mark up, which means more disastrous closures," said one official in Punjab APTMA.
Heavy electricity load shedding in recent past and forthcoming Sui gas load shedding, coupled with liquidity crunch, has brought textile exports down by 25 percent in the first quarter of 2008-09, comparing with the corresponding period in quantity terms. Leading textile units have started delaying salaries of their contractual as well as regular staff, besides resorting to retrenchment of daily wagers.
It is interesting to note that majority of the textile millers are waiting cautiously the outcome of elections in the US, stating that an injection of 1.5 billion dollars of US aid, besides other facilities, including relief package from the "Friends of Pakistan" forum may open up a window of opportunity for this sector. "The most satisfactory aspect of the US aid is that it is meant for economic and welfare projects," said one miller, adding that the US policy-makers also intend to monitor its spending, which again is a healthy sign. According to industry circles, the bipartisan bills of 15 billion dollar-aid up to 2015 and establishment of Reconstruction Opportunity Zones (ROZs) in tribal areas may bring the much-awaited turn around to the industry. They further hinted the government was delaying new textile policy as well as the textile package until the US government approved its financial package for terrorism-stricken Pakistan.
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