Businessmen fear RPPs will further push up cost of doing business

  • January 22, 2010
Government should fully protect the national interest before going for rental power plants (RPPs) as the price of electricity produced by RPPs would reportedly go further up by 31-45 percent which will significantly enhance the cost of doing business jeopardizing survival of industry and creating more problems for the fragile economy.

This was the consensus opinion of businessmen at a meeting held at Islamabad Chamber of Commerce & Industry (ICCI) chaired by Zahid Maqbool, President ICCI

Zahid Maqbool said that there isn’t enough gas available in the country to meet the RPPs’ needs while no provision has been made for the transport of the alternative fuel, furnace oil, to the RPPs which could plunge this whole project into trouble wasting precious resources of the country.

He stressed that instead of resorting to expensive power projects like RPPs, government should pay more attention to the cheap energy sources including hydro, biomass, coal, solar, wind and nuclear etc. He said the present energy mix of 65 percent thermal and 35 percent hydel was not affordable which needs to be balanced by moving towards economical alternative energy sources.

Zahid Maqbool said China is producing more than 50 per cent of its electricity through coal while India is producing 40 per cent, but Pakistan unfortunately is generating less than one per cent of power from coal despite having coal reserves of around 185 billion tons only in Thar, which are reportedly equivalent to 618 billion barrels of crude oil.

Businessmen said unfortunately, government has not yet come up with a comprehensive long-term energy plan and urged that government should take immediate measures to draw up a blueprint for meeting the country’s energy requirements for five, 10 or 15 years from now.

They said that the acute power and gas deficit has not only crippled the country's industry and agriculture inflicting injury to whole economy, but is also increasing unemployment as many industries have almost been closed.

ICCI President said government started the New Year with 18 percent hike in gas and 12 percent in power tariffs. He said already the government has reportedly enhanced electricity tariff by about 35 percent since October 2008 as against the officially announced increase of 18 percent and the recent increase will almost devastate the business activities and economy at large apart from bringing another flood of price-hike in the country.

He urged the government to immediately resolve the circular debt issue so that independent power producers (IPPs) could operate up to their full capacity, which will sufficiently mitigate the current energy crisis.