Massive power loadshedding has already badly crippled the trade and industrial activities in the country and further 22 percent raise in power tariff by the government will give a fatal blow to business activities plunging economy into deep troubles.

This was observed by Mian Shaukat Masud, President, Islamabad Chamber of Commerce & Industry (ICCI) while giving his reaction to reports that Pakistan, World Bank and ADB have agreed to raise power tariff by 22-26 percent in three phases under which 7 percent power rates will be increased on October 1 this year, 10 percent on January 1 and 5 percent on April 1, 2010.

He questioned the logic of raising power tariff at a time when the country was facing huge power outages. He said first the government should generate sufficient electricity to meet the power needs of the country and then think about tariff hikes because without meeting power needs, hike in its rate was unjustified.

Mian Shaukat said it seemed that country’s interest was put on the back burner and government was in pursuit of fulfilling the agenda of donors at the cost of crippling the national economy and adding more miseries to the people. Who will come to invest in Pakistan when the cost of electricity will become unaffordable for businesses? He questioned.

He said already due to high utility tariffs, high interest rates and other anti-business measures, all sectors of the economy, except for agriculture, were showing negative growth, particularly LSM sector that went down by more than 7 percent. The high cost of doing business has made our exports highly uncompetitive in international markets due to which the country failed to achieve even the revised export target of $19.2 billion causing a whopping trade deficit of $17.040 billion for the outgoing fiscal year. The foreign investment has also registered a massive decline of 51 percent during this period.

ICCI President said such dismal performance of the economy badly needed some special relief measures for trade & industry like reduction in power tariff, hefty cut in interest rates, relief in taxes and duties on import of machinery, equipment & essentially needed raw material etc.

But instead of providing breathing space to industrial sector, spiking power tariff would bring the industrial activities to a grind halt because industrialists could not afford any further hike in cost of doing business. Therefore, he called upon the government to desist from any move to increase power tariff. Instead, government should take measures to improve the efficiency of the power sector by controlling its transmission, distribution and line losses which have gone up to 40 percent in some cities.