KARACHI, March 14: Frequent and unscheduled power outages for longer periods have forced many industries to avoid entering into fresh export orders, fearing huge losses, if deadlines are not met.
The worsening power crisis has shaken up the confidence of the industry, in general, but those involved in export business are more concerned and are reluctant to enter into fresh export commitments, industry sources told Dawn on Friday.
In the past whenever there were delays in shipments, exporters used to airlift consignments to meet their deadlines. But, now with least profit margins owing to high cost of doing business, the industry is no more in a position to bear extra costs. Consequently, “we are avoiding entering into fresh export orders,” lamented Federal B Area Association of Trade and Industry chairman Idrees Gigi.
This is going to have a negative impact on many targets fixed by the government to achieve around seven per cent growth. With lesser exports, the trade gap would, particularly, further worsen which is already at $12.5 billion during the first seven months of the current fiscal year.
The industry is concerned over government apathy towards the power crisis being faced by the economic hub of the country where most of the revenue is generated. The reduced industrial activity would also have a negative impact on revenue targets which are already short by over Rs40 billion, said Mr Gigi, adding the industry only suffers when power utility resorts to loadshedding or unscheduled power cuts and this causes a huge financial and production loss.
According to a KESC notification, power supply to almost all industrial areas of the city will remain closed between 6pm and 11pm.
However, Mr Gigi said, there are frequent and unscheduled power breakdowns which are the main irritant for the industry.
“There are industries, which have their own power generation units, but it is costly, and small-and-medium sized units cannot afford this.”
He further stated that the KESC collects fixed charges from consumers for 24 hours, but gives power for only 12 to 15 hours. “Our foreign buyers are least concerned with our issues (power breakdowns or loadshedding); therefore, even on getting orders, the industry is avoiding as shipping schedule cannot be met under these circumstances,” he said.
Some members of the F B Area Association of Industry, he said, are demanding that the association should go for self-generation of power for the entire industry, “but there are those who have given up and are selling their units.”
He further stated that flight of capital is taking place, but the government is least concerned.
Mr Gigi expressed concern over the fate of labour “because this will aggravate unemployment problem and as a result of this, law and order situation will worsen.”
Korangi Association of Trade and Industry Chairman Sheikh Fazle Jalil said that worst is yet to come because summer has just started, but the power utility has resorted to loadshedding and unscheduled power outages.
Under these circumstances, Mr Jalil said exporters are avoiding committing fresh export contracts. In the past, he said when shipping schedules were missed, exporters used to airlift the consignment to meet the delivery time. However, high cost of inputs and reduced profit margins have left no space for exporters to bear extra costs.
Site Association of Industry Chairman Nisar Sheikhani said fortunately there are no unscheduled power outages in his area, except load-shedding between six to 11pm.
He expressed dismay over the situation and said that in 1995 the country was planning to export power to India because around 1500mw was in excess, but in 1996, the surplus turned into deficit.
