A week ago, I was invited by the leadership of the Faisalabad Chamber of Commerce and Industry to their city to stir the conscience of the government authorities being the patron-in-chief of the United Business Group (UBG) regarding the industrial devastation of Pakistan’s Manchester.
I was joined by Dr Gohar Ejaz, leader of the business community and Chairman of the FPCCI’s Think Tank on Pakistan Economy’s Revival and Growth (PERG). Other FPCCI representatives who travelled to Faisalabad for the occasion included Zaki Ejaz and Momin Malik from Lahore, Ahmed Chinoy from Karachi, Daru Khan from Quetta, and Mian Abdul Haque Jatoi from Dadu, Sindh.
A sea of business leaders converged at the Faisalabad Chamber of Commerce and Industry, all anxious to voice their concerns. As Chamber President Dr Khurram Tariq took the stage; he painted a bleak picture of the industrial collapse in Faisalabad, leaving no doubt that the city is in a state of despair.
Following that, every speaker who got the opportunity, described the industrial devastation in the city from their own perspective, and each perspective seemed to be the true one. They said that many large industrial families in the city have closed their industrial units for several months now.
The crisis has deepened to an extent where even the largest scrap metal dealers are refusing to collect discarded machinery, citing a lack of storage space in the city’s warehouses. It’s hard to imagine that this city was once the industrial hub of Pakistan, earning it the nickname ‘Pakistan’s Manchester’.
A factory owner revealed that he managed to keep his business running despite a significant increase in electricity costs, from Rs500,000 to Rs800,000. However, when his power bill surged to Rs2.5 million, he was left with no choice but to shut down his operations, highlighting the crippling impact of soaring energy costs on industries.
When the tales of woe from the power loom owners started pouring in, the audience was visibly moved.
Chamber members painted a dire picture, describing how the city is grappling with widespread joblessness and hunger, affecting all segments of society, and leading to a disturbing rise in street crimes.
In a chilling reality, thugs are now willing to kill for mere pennies, as the value of human life continues to plummet in the face of economic desperation.
A mill owner recounted a harrowing incident that occurred at the beginning of the month. Upon arriving at his mill one morning, he found around 100 workers protesting at the main gate. Inquiry revealed that the workers had received their monthly wages the previous day, but 45 of them were robbed on their way back to their villages. The workers were protesting because they had no food to feed their families.
The mill owner claimed that he had filed a police report against the robbers, but a month has passed and none of the culprits has been apprehended.
The situation has taken a dark turn, with robbers now openly setting up roadblocks to rob unsuspecting citizens. Labourers from surrounding rural areas are particularly vulnerable, with mugging and snatching becoming an everyday menace. The Punjab IG’s special visit to Faisalabad has failed to yield any tangible results, leaving the city’s residents at the mercy of these marauding criminals.
In a chilling warning, the Chamber members concurred that the industry shutdowns have created a perfect storm of unemployment, pushing desperate individuals towards street crimes. They cautioned that if the government doesn’t break free from the stranglehold of IPPs, the city will descend into anarchy.
I shared my distress with the Chamber members, lamenting that it’s heart-breaking to report to the government that an unprecedented number of factories – over 100 – have been compelled to close their operations in Faisalabad, a city once thriving with industrial activity, due to the crippling electricity costs.
The situation is dire, with banks poised to swoop in like scavengers, targeting the management of shuttered units. As a result, numerous factory owners might be reluctant to admit that their facilities have closed, lest they face humiliation and harassment at the hands of bank officials. I am deeply distressed by the plight of workers who have lost their livelihoods.
How are they making ends meet? How are their families surviving without a steady income? The situation is so bleak that educated individuals are now willing to take on menial jobs just to make a living.
It’s perplexing that the government remains oblivious to the severity of the crisis. Why is the government turning a deaf ear to the pleas of the business community? Despite the FPCCI’s efforts to expose the IPPs’ fraudulent practices, why is the government dragging its feet in addressing this critical issue?
It’s now common knowledge that the government is paying a whopping Rs2 trillion to IPPs for their idle capacity, which is then recovered from the public through exorbitant electricity bills. This amount translates to $7 billion. Ironically, these payments are being made to IPPs that are not even generating electricity.
A critical question arises: If the government has failed to establish transmission lines, why should the electricity consumers bear the brunt? Who is accountable for the industries’ defaults? Who will shield them from the banks’ wrath? And what about the vulnerable workers who have lost their jobs at these mills?
A sense of desperation pervades the air. Pakistan’s economy is in shambles. Faisalabad is on the brink of eruption, with protests and street demonstrations imminent. Through the FPCCI platform, we’ve been urging the government to intervene and restore order, pleading with them to take charge of the situation.
After all, why is the government not addressing this issue immediately when it has a significant stake in 52% of the IPPs? Can’t it renegotiate their terms? Can’t they be operated on a ‘Take and Pay’ basis instead of ‘Take or Pay’? What is the government’s thought process, and whose interests is it trying to safeguard?
The shutdown of industries is a stark testament to the government’s policy failure, leaving workers jobless. We urge the government to rectify its approach before the situation escalates, with protests erupting nationwide and control slipping from their grasp. The tipping point is near, and the situation is dire.
Copyright Business Recorder, 2024
The writer is Patron-in-Chief, United Business Group
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