Priority to IPPs by govt hurting textile sector: APTMA

04 Sep '13

2 min read

Gas tariff hike of up to Pk Rs. 85 per mmbtu (million metric British thermal units) for Captive Power Plants (CPPs) would render the most efficient and highest foreign-exchange generating textile industry ineffective, All Pakistan Textile Mills Association (APTMA) Zonal Chairman Yasin Siddik said in a statement.

Mr. Siddik said that Independent Power Plants (IPPs), which are highly expensive and inefficient, are being encouraged at deterrence of CPPs and national textile industry, reports Business Recorder.

Elucidating on this, the APTMA official said increased tariffs for CPPs results from procurement of high-priced power from IPPs and re-selling the same at further enhanced rates to textile industry.

Increased power tariffs directly push up the cost of production at textile units, which in-turn impacts their global competitiveness as producers tag their products at high prices, he added.

While IPPs are selling power to the nation at the world’s highest rates and hindering the country’s economic growth, CPPs help textile sector generate its own power, the APTMA official explained.

Further citing National Electric Power Regulatory Authority’s (NEPRA) data, Mr. Siddik said the least efficient CPPs even operate at over 40 percent capacity, while IPPs net efficiency hardly comes to 24 percent.

Also, as CPPs do not receive any Government subsidy they do not burden the taxpayers or national exchequer, but still greatly contribute to foreign exchange earnings and employment generation in the country, he added.

Mr. Siddik urged the Government to not prioritize the IPPs, which are continuing to build great debt pressure on the country, and badly hitting the performance of the textile sector.

Mr. Siddik pointed that average power tariff for textile industry in South Asian region is below 10 cents, whereas in Pakistan it is more than 14 cents. In comparison, power tariffs in India, China, Bangladesh and Sri Lanka prevail at around 11.3 cents, 8.5 cents, 7.3 cents and 9.2 cents, respectively.

Also, the rate of interest that Pakistani textile entrepreneurs pay is high at 9 percent, as compared to 7.25 percent in India, 6 percent in China and 7.75 percent in Bangladesh, he noted.

Fibre2fashion News Desk - India

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