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APTMA fears massive closures if competitive energy tariff not allowed

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11 months ago

June 12, 2023

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APTMA fears massive closures if competitive energy tariff not allowed

Chairman of All Pakistan Textile Mills Association (APTMA) North Zone Hamid Zaman has feared massive closures and retrenchment of textile workers in Regionally Competitive Energy Tariff (RCET) of 9 cents/kWh for electricity and $9/MMbtu for gas for the export sector not allowed by the government across the country.

He was addressing a post-budget press conference at the Zonal office of the association on Monday. Senior Vice Chairman APTMA Kamran Arshad, Vice Chairman Asad Shafi, Secretary General APTMA Raza Baqir and other senior members of the association were also present on the occasion.

“The electricity supply should be made to the textile industry at the actual cost of service (excluding cross-subsidy) and a level playing field should be ensured in the supply of gas to maintain competitiveness across the country and internationally,” Zaman stressed.

Hamid Zaman said as per NEPRA, the actual cost of electricity is Rs 23/kWh (¢8.2/kWh) for B3, B4 consumers. This cost includes CPP, EPP, T&D and service charges, which is enhanced to above Rs 40/kWh after adding cross subsidies, capacity payments to IPPs, line losses, power thefts, financial and other charges. It would be unjust and unfair to pass on the cost of such inefficiencies and maladministration to export industry with 100% recovery of bills and zero losses, he added.

“Charging electricity tariff of ¢16/kWh after including cross subsidies is highest in the region,” he said and added that electricity tariff in India is ¢8/kWh, ¢10/kWh in Bangladesh and ¢6/kWh in Vietnam respectively.

Furthermore, he said, the RCET is not subsidy. It is determined after excluding cross subsidies as cross subsidies cannot be exported.

The APTMA chairman said a recent study of Pakistan Institute of Development Economics (PIDE) has warned of deindustrialization in Punjab, as the impact of withdrawal of Regionally Competitive Energy Tariff (RCET) would be disastrous in terms of laying off workers, decline in investment, exports share, contraction in profit margin and overall industrial output. The study has concluded that increase in electricity tariff for the industry is in fact a cross-subsidy from industry to other sectors with no legal, economic or technical justification.

Chairman North zone said the industry has earned $16 billion exports during the current fiscal year against a target of $25 billion in the absence of government support. The textile exports surged to $19.3 billion last fiscal year to a supportive attitude of the government had been supportive to its growth.

According to him, continuation of RCET would facilitate upsurging exports to $ 50 billion in next five years as the textile sector has planned to setup 1000 garment plants in SME sector by investing $ 7 Billion yielding annual exports of $ 20 Billion and providing employment to well over 700,000 workers.

He said 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 of 1000 garment units to create millions of new jobs, he added.

The APTMA chairman sought cost of service-based tariff for export sector, saying that the RCET for electricity @ ¢9/kWh and gas @ $9/MMBTU should be restored for export-oriented sectors for the next financial year.

He said enough amount can be allocated for RCET in energy subsidy of Rs 1074 billion fixed for the next fiscal year. He has also sought application of uniform gas price for export industry throughout the country by implementing WACOG passed in February 2022.

He said 30% of Punjab based textile industry has already closed partially and complete shutdowns are increasing day by day. Closure would result in loss of $10 billion exports per annum.700,000 employees have already lost their jobs in the textile sector alone and millions more are expected to be laid off, he added.

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

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2 days ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Govt jacks up power price by Rs1.47 per unit

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2 days ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Hong Kong allows China’s digital yuan to be used in local shops

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May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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