APTMA urges PM to withdraw FAS deduction decision

02 Mar '12

3 min read

Chairman All Pakistan Textile Mills Association (APTMA) Mohsin Aziz has urged the Prime Minister Yusuf Raza Gilani and Minister for Water & Power Syed Naveed Qamar to withdraw the decision of Fuel Adjustment Surcharge (FAS) deduction determined by NEPRA for the month of August 2011 and to be charged from the industrial consumers in the month of March 2012.

He said implementation of this decision would lead to massive closures in a situation when industry is already facing energy shortage with paramount financial crunch due to high bank mark ups.

Mohsin said charging of FAS by over Rs3 per unit for the month of August is excessively high and the worst part of the decision is that it is meant for the month of August 2011 with retrospective effect. He lamented this move and added that the textile industry has already affected sales and realized proceeds on agreed cost factor and it would be impossible to retrieve it from the customers at this stage. He said it would be taken as negation of good business practices both inside and outside country.

According to him, even the government would not be able to come up with a practical mechanism as to how the FAS can be recovered from the customers and then paid to the concerned DISCOs.

Chairman APTMA feared that any such deduction would put textile industry into a financial crunch, as the APTMA estimates suggest that a mill with the consumption of 70,000 to 100,000 units per day is supposed to bear an impact of Rs7 million to 10 million if the decision is implemented by the government.

He said the textile industry was already on the brink of collapse with no liquidity available to meet its expenses and deduction of additional amount from mills under the FAS would bring total closure of industry. No textile mill is in a position to pay such huge amounts and any power supply cut from DISCOs would pave the way for bank defaults across the country, he added.

Mohsin said textile industry is an export-oriented industry and it cannot pass on this additional burden against already materialized transactions. Further, he said, the textile industry was highly energy intensive. But still not only the industry faces six hours a day load shedding but gas supply is also restricted due to political considerations of the government. Resultantly, the industry was lacking cash generating capacity.

He expressed the hope that sanity would prevail in government circles and the Prime Minister would direct the authorities concerned to withdraw the decision immediately in the larger interest of textile industry, earning foreign exchange and generating jobs for millions of workers.

All Pakistan Textile Mills Association (APTMA)

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