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Energy shortages cost Punjab industries a fortune

Energy shortage is costing Punjab industries a fortune. Spinners bear additional expense of Rs27 billion on power generations and poultry farmers endure around Rs3.06 billion, while transporters cough up speed money of about Rs2.8 billion to Sindh bureaucracy on export consignments from Punjab.

“A spinning mill, having an average 25,000 spindles, pays Rs16,666 per hour gas charges for the gas they consume for power generation,” said Shahzad Ali Khan, chairman of All Pakistan Textile Mills Association (Aptma) Punjab. Power production from gas costs them at least 3.5 higher than that supplied from the national grid. “And, electricity generation from diesel pushes this cost to five times higher further,” he added.

Khan said the gas-generated electricity costs Rs5.5 per unit, whereas electricity tariff by the Pakistan Electric Power Company (Pvt.) Ltd. (Pepco) comes about Rs11 per unit. Preferably, mills switch to gas-generated electricity for whatever number of days it is in the pipelines.

“For approximately 187 days when gas remains suspended, the mills have to get power at double the rate that they produce independently,” he said, adding that they end up paying Rs33,332 per hour for Pepco supply.

“So for 187 days, each mill has to sustain additional expenses of Rs74.79 million (Rs16,666x24x187), which their counterparts in other provinces of the country do not pay,” he said.

“Average daily industrial load shedding in Punjab stands at five hour a day, ranging from 4 to 8 hours on different occasions,” said Mehmood Ahsan, Aptma Punjab senior vice chairman. He said the industry has to operate furnace oil run generators for average five hours a day. Spinners operate 362 to 364 days a year.

They bear additional expenses of Rs51.03 million (16,666×3.5x5x175). Thus, each spinning mill in Punjab has to bear an average Rs125.82 million (Rs74.79+Rs51.03 million).

Vice chairman of Aptma Punjab said there are 263 spinning mills in Punjab that bear cumulatively additional cost of Rs33 billion on power and energy that is hurting the Punjab based mills badly, he added.

M I Khurram, who runs a composite textile knitwear unit besides spinning, said that the value added apparel industry consumes less power but still bears additional expenses of at least Rs20 million a year onpower generation. This, he added, it is impacting the viability of small apparel producing units that have to produce electricity from diesel-run generators.

He said located far from seaports, all exporting industries of Punjab have to bear the cost of transportation to Karachi. He said that extortions (Bhatta) paid by transporters in Sindh is recovered from the exporters. He said after crippling of Railways network the fares of road transporters have increased exorbitantly. The high transport charges, he added, could only be brought down by making goods train operational.

A Lahore based transporter Khusnood Ali said the transporters do not pay the traditional Bhatta as prevalent in some cities of Sindh.

However, he admitted that at least 10 percent of the transport cost is due to the speed money that the transporters have to pay to various government departments as soon as they enter Sindh.

He said the trucks loaded with containers pass through Punjab without any hassle but in Sindh every concerned department from police to excise and other forces take their share to ensure hassle-free journey.

An artificial leather producer Anjum Nisar said that every industry in Punjab has suffered due to power and gas shortages. He said on average industries suffer a loss of Rs34 million per annum if they produce one megawatt power on days when gas is not available or in case of power load shedding. He said smaller units consuming 100-300 kilowatt have to use diesel for their generators.

Former Chairman Pakistan Poultry Manufacturers Association Abdul Basit said that he operated controlled poultry farms both in Punjab and Sindh.

He said the power failure in the rural Punjab where these farms are located costs them an average 70 percent extra, as they have to resort to self generation than in Sindh where there is hardly any load shedding. He said a 30,000 bird controlled farm bears additional expense of Rs45,000 per harvest. He said controlled farm breeds broiler chicken four times a year.

They end up paying Rs180,000 per year more than their counterparts in Sindh.

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