LAHORE - The Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) has strongly criticized the abrupt increase of 74 per cent in electricity rates by the new government and urged the authorities to withdraw the jump as it would render local value-added textile industry uncompetitive in the international market. PRGMEA Central President Sajid Saleem Minhas said that it is understandable if the tariff is raised by 5 or 10% but the drastic jump of 74% is totally illogical.
He said that the hike in electricity tariff would make garment export costlier and render Pakistani exports uncompetitive in the international market. Subsequently, India, China and Bangladesh would capture markets presently dominated by Pakistani exporters. He suggested the government that before making any dramatic changes in the electricity prices, the stakeholders of the industry should have been taken into confidence and engaged to workout the electricity tariff.
Sajid Saleem Minhas said that increase in electricity tariff from Rs9.18/KWH to Rs14.82 under the new energy policy will render garment industry inefficient; as sharp increase in power rates is a draconian measure against industry.
An exorbitant increase in electricity tariff is a death warrant for garment and apparel industry, which is already facing disparity in the inter-provincial electricity rates and becoming unviable fast with every passing day. PRGMEA North zone chairman Farooq Meyer feared that the industry would lose its strength of earning $13-14 billion exports per annum due to looming energy crisis amidst an indifferent attitude of policymakers. The new industrial tariff would wipe out the value-added textile industry in Punjab altogether.
PRGMEA Chief Coordinator Ijaz Khokhar stated that the government was not in a position to provide uninterrupted power and gas supply to the industry due to which industry is facing increase in cost as a result of less than capacity output and now such a hefty tariff increase cannot be justified.
Ijaz Khokhar said that since the country was passing through an era of economic uncertainty persistent inflation, high cost of doing business as a result of which industry was facing severe challenges such as war on terror and insecurity etc. such cost increases could lead to decrease in export earnings and escalating trade deficit. He feared that if the precautionary measures are not taken carefully the survival of the industry would become elusive.