The All Pakistan Textile Mills Association (APTMA) on Wednesday has demanded review of the IPPs agreements and forensic audit of the independent power producers (IPPs).
Chairman APTMA Asif Inam has said that the expensive electricity has made it difficult to export. “We have pointed out the line of action,” he said.
He demanded of the government to initiate forensic audit of the independent power producers (IPPs). He also urged for a hurried review of the contracts with the IPPs. He said capacity charges and expensive power have cast negative impacts over the exports from Pakistan.
He pointed out that the private sector’s IPPs owners are Pakistani citizens.
The All Pakistan Textile Mills Association (APTMA) is an association of textile industry representing hundreds of textile mills in the country.
It is pertinent to mention here that textile is Pakistan’s largest industry and the most important export from the country.
Separately, Chairman Pakistan Kissan Ittehad Khalid Khokar said that food security was a major international issue and that the recent increase in electricity tariffs for tube wells would be disastrous for the agriculture sector.
During a press conference at the local press club on Wednesday, Khokar shared the agriculture’s critical role in the country’s economy, noting last year’s 6.5% growth in the sector. He stated that out of the total $31.5 billion in exports, agriculture’s share exceeds $24 billion.
Khokar lamented that historically, electricity costs for agriculture were lower than for industry. He argued that agriculture was becoming unfeasible due to high tariffs and input costs, including fertilizers.
The chairman expressed concerns over agreements with Independent Power Producers (IPPs), particularly the high capacity charges, which he claimed amount to Rs 2200 billion. He called for revisiting these agreements, highlighting that payments to IPPs are made in dollars which also put stress on the economy.
Khokar also revealed a 21% decline in Urea fertilizer sales in June, warning that this could hurt per-acre production. He also hinted at a 30% drop in cotton cultivation area, which could damage the economy. If Pakistan produced 20 million cotton bales, it wouldn’t need to take loans, he claimed.
Khokar pointed out that while industrial electricity tariffs were reduced by Rs 10/unit, the agriculture sector was ignored completely. He urged the government to lower Urea fertilizer prices to Rs 3500 per bag, stressing that affordable inputs are essential for productivity.
High electricity tariffs have led to the suspension of thousands of tube-well connections, deterring many farmers from crop cultivation. Khokar feared that wheat production could drop by 50% next year.
He advocated for a 25-year special policy for sustainable agriculture.
Regarding the IPP capacity charges, Khokar suggested that since 80% of IPPs were owned by Pakistanis, they should be approached to resolve the issue. He stated that, unlike in other countries, Pakistani cotton farmers are not economically protected and they face significant pricing challenges for their produce.