Muhammad Jalaluddin Roomi, a former Punjab minister for industries and ex-president of Multan Chamber of Commerce, has said that the government should allow free trade mechanism for yarn to prevail as this is benefiting the industry with increased exports.
Talking to newsmen he expressed disappointment over the proposed 13.6 percent increase in electricity tariff and resumption of four-hour load shedding for the textile industry, and said that these would affect viability of mills as well as supply of yarn to ancillary industry in the domestic market.
He said that the unbearable electricity tariff would render the export-oriented textile industry unable to compete in the international marketplace. The textile spinning and organised weaving industry could not sustain the tariff increase as electricity constitutes 40 percent of the conversion cost of the industry and might lead to closure of mills, he said.
Roomi said that average rate (B-3/B-4) of electricity tariff for the textile industry was Rs 3.70 per unit in 2007, which rose to Rs 6.35 in two years, an increase of 60 percent. "The textile industry is not in a position to bear the unprecedented hike in power tariff, effective January 1, 2010."
He said that over last two years the spinning industry had been forced to endure unprecedented load shedding, which was recently done away with due to efforts of Water and Power Minister Pervaiz Ashraf and Textile Minister Farooq Saeed. He urged the textile ministry to intervene and exempt the textile industry from electricity load shedding.
"The spinning industry is the backbone of the textile value chain and continuous electricity supply at competitive tariff is imperative for the industry and exports to meet long-term goals of trade and textile policies."
He called for a separate electricity tariff for the textile industry on B-3/B-4 connections. He said the rise in gas and electricity prices amid constant load shedding coupled with shortage of provisions and lack of planning to facilitate the industry was adversely affecting businesses and industries in the country.
Roomi said that any industry is dependent on support of the government and questioned that when the local industrialists do not feel secure how can foreign investors feel confident enough to make investments. He said the government should take all the business bodies into confidence and chalk out plans to facilitate them and resolve their issues.
Industries in Pakistan are suffering a great loss because of the preferential treatment given to goods under ATT, and the cost of business is rising owing to the sharp rise in government tariffs and political instability. He said many businessmen had suffered huge losses because of the faulty policies governing the Afghan Transit Trade (ATT) agreement with Afghanistan. "50 per cent of the goods meant for Afghanistan are diverted into our markets illegally" he said. "It is not just a loss of revenue but also a discouragement for businessmen here," he stressed.