ICCI rejects any new power tariff hike as it would cripple the economy

  • May 29, 2014
Islamabad Chamber of Commerce & Industry has expressed great concerns over the decision of the Economic Coordination Committee to include debt servicing component of inefficient Gencos and Discos in the cost of electricity due to which the power tariff is like to surge by Rs.2.35 to Rs.5 per unit and will lead to the closure of business and industry in the country.
Shaban Khalid, President, Islamabad Chamber of Commerce & Industry said it is very unfortunate that instead of improving the performance and efficiency of power generating and distribution companies, government is victimizing the consumers to bear the cost of their poor performance.  He said the present government had made the largest increase in the history of power tariffs for industrial, commercial and bulk consumers in August 2013 which ranged from 62-74 percent for some categories of consumers and greatly pushed up the cost of doing business rendering our exports highly uncompetitive. Now another big increase will badly hit the trade and industry making Pakistan virtually a trading country as all manufacturing entities will eventually close down.
He said despite huge potential to produce cheap power through hydro and coal sources, power tariffs in Pakistan have been increasing since 2008. Over the last six years, power tariffs have cumulatively risen by more than 90 percent for industry and more than doubled for commercial consumers due to which power tariffs in Pakistan have become highest in the region putting the country at great disadvantage. The insertion of the cost of additional technical losses and interest on power sector loans in power tariffs would not only make the life of common man more miserable, it will lead to closure of business & industry, cause more unemployment, give rise to inflation bringing the whole economy almost to a grind halt.
He said according to a statement of Mr. Said Chattha, Secretary Water and Power before the Senate Standing Committee on Water & Power, Pakistan had suffered a mammoth loss of Rs.150 billion on account of power theft and line losses in 2012-13, which is enough to show the poor performance of power generation and distribution companies. He said the better policy is to control huge line losses & power theft, ensure full recovery of all outstanding electricity dues and take exemplary action against corrupt elements. But it seems the government has adopted an easy approach of passing on the consequences of poor performance of Gencos and Discos to power consumers instead of improving their efficiency.
Shaban Khalid said government should urgently put its own house in order, remove inefficiencies from power producers and distributors and instead of hiking power tariffs, take measures to provide energy at affordable cost to businesses so that the business & industry could flourish which will improve exports, create more jobs, enhance exports and increase tax revenue for the national exchequer.