Chairman All Pakistan Textile Mill Association (APTMA) North Kamran Arshad has urged the government to revise agreements with Independent Power Producers (IPPs) forthwith to save the industry from a total collapse, particularly the export-oriented textile industry.
He was addressing a press conference at the APTMA Lahore office. Secretary General APTMA Mohammad Raza Baqir and Energy Advisor APTMA Tahir Basharat Cheema were also present on the occasion.
Mr Arshad thanked Patron-in-Chief APTMA Dr Gohar Ejaz for raising the issue in his personal capacity as well as from the platform of the Federation of Chambers of Commerce and Industry (FPCCI). We are standing firmly behind him, he stressed.
He pointed out that the textile industry exports have registered a four percent drop in the month of June 2024 compared with the corresponding period. The exports are dwindling down further due to the absence of Regionally Competitive Energy Tariff (RCET) of 9 cents/kWh, he said, adding that the industry was forced to pay 15.5 cents/kWh due to the unacceptable agreements with IPPs.
He lamented that the exports are suffering heavily with minimum chances of growth ahead. Half of the APTMA members have already closed down their units, leading to job losses, increase in poverty and economic collapse in the country.
Chairman APTMA made it clear that the APTMA members were not asking for any subsidy from the government but a regionally competitive energy tariff.
This is the right time for the government to take a decision of cancelling agreements with IPPs and ensuring RCET to the industry, he stressed.
He said the IPPs have received payments amounting to Rs1.95 trillion over the past year, including Rs46b to two IPPs with zero power generation and Rs370b to three plants for generating power at 15pc load factors. Due to these huge payments, he deplored that the government was buying electricity at Rs750 per unit from a power plant and Rs200 per unit from coal power plant. He said power is being sold to consumers at Rs60 per unit because of the most controversial contracts, mismanagement and incompetence.
He further added that National Electric Power Regulatory Authority’s (NEPRA) data suggests that at least four power plants were receiving Rs10 billion per month without supplying a ‘single unit’ of electricity to consumers. He also urged the IPPs to renegotiate their contracts to alleviate the financial burden on the nation.
According to him, the government was disbursing Rs140 billion to a single plant operating at a 15% load factor, Rs120 billion to another at 17%, and Rs100 billion to a third at 22%. These three plants alone account for 370 billion rupees of the total expenditure, he pointed out.
