Chairman APTMA fears complete closure of textile industry if RCET facility withdrawn

By Muhammad Sudhir Chaudhry

LAHORE: Chairman All Pakistan Textile Mills Association (APTMA) North Zone Hamid Zaman has expressed the apprehension that the textile industry in the country would be at the verge of collapse in case the government withdraws the Regionally Competitive Energy Tariff (RCET) of Rs19.99/KwH.
He was addressing a press conference at the Zonal office of the Association on Friday. Senior Vice Chairman APTMA Mr. Kamran Arshad, Vice Chairman Mr. Asad Shafi, former chairmen including Mr. Abdul Rahim Nasir and Syed Ali Ahsan and Secretary General APTMA Mr. Raza Baqir was also present on the occasion.
Hamid Zaman said that the country would face further deterioration in the balance of payment crisis as pulling out of RCET would result in a loss in exports of $10 billion per annum. It would also lead to disruptions in the investment plan of the industry for setting up 1000 garment units to create millions of new jobs, he added.
“Punjab is the hub of textile industry and closure of large scale production units would render seven million textile workers jobless”, he said and feared that further closure of the industry would result in massive unemployment in the country.
Chairman APTMA said reliance on grid electricity at over Rs40/unit would make the Punjab textile industry uncompetitive in the international and local markets, and this would result in shifting of the available export orders to other countries.
Zaman pointed out that the export sector in Sindh was being provided gas at $3.11, whereas in Punjab, it was $9/MMBtu. APTMA wants the government to continue to extend RCET with an electricity tariff at Rs19.90/unit and a gas tariff at $7/MMbtu to the export industry across the country including captive power plants, he said.
He has also stressed the government to extend gas priority allocation to the export-oriented industry.
Former Chairman Rahim Nasir said that an increase in energy tariff would lead to closure of over 200 textile units in major industrial cities of Punjab, including Faisalabad, Lahore and Multan. He also sought an end to the inter-provincial disparity in gas tariff and urged the government to ensure unified gas tariff in the country.
Syed Ali Ahsan said the textile industry has already started feeling the heat, and 30 per cent of the units have suspended their production. He said the government should not shift system inefficiencies and exclude cross-subsidies to make the export-oriented industry viable.
Senior Vice Chairman Karman Arshad said the industry in Punjab would not be able to survive in the presence of more than one tariff in the country. He said the viability of small and medium enterprises (SMEs) would be eroded with the increase in the energy cost. He said there was no mention of pricing in the 18th amendment, but the prevailing disparity among provinces has put the industry in Punjab in a troublesome situation.
“We have invested $5 billion in the textile sector over the last three years, and the textile sector exports surged to $19.5 billion in the financial year 2022 from $12.5 billion in FY2020,” he said.
Vice Chairman Asad Shafi feared the robust growth of 55 per cent in exports in FY22, and an investment of $5 billion would go to waste in case the industry in Punjab is discriminated against other provinces on energy cost.
The APTMA leadership has sought immediate intervention of the prime minister and finance minister to stop the withdrawal of the RCET from March 1, 2023, saying that the government should ensure unified gas tariff for the textile industry countrywide.

Leave a Reply

Your email address will not be published. Required fields are marked *