KARACHI, July 12: The local businessmen on Saturday formed a five-member committee at their representative meeting in the Karachi Chamber of Commerce and Industry to engage the government in negotiations on raise in gas and electricity tariffs and other issues confronting the industry.

A four-point agenda has been set for the committee, headed by KCCI President Shamim Shamsi. Other members of the committee are Zubair Motiwala, Nisar Sheikhani, Muzammil Hussain and Jawed Bilwani.

The committee will ask the government to review 31 per cent raise in gas tariff for industry and consider either freezing or diluting the proposed increase in electricity tariff to be announced in the near future.

Another issue agitating the industry is research and development subsidy assistance now being given at six per cent on export of garments, five per cent on home textile and three per cent on fabrics.

The industry also wants withdrawal of 10 per cent withholding tax on electricity bills.

Iqbal Ibrahim of All-Pakistan Textile Mills Association, Siraj Kassim Teli, a former President of KCCI, Nisar Sheikhani of Site Association of Industry, Waqar Monnoo, a former chairman of Aptma, and Shabbir Ahmad of Bedwear Manufacturers and Exporters Association attended the meeting.

Conspicuous by its absence in the meeting was top leadership of the apex trade body, the Federation of Pakistan Chambers of Commerce and Industry.

Businessmen indicate that the committee is expected to hold its meeting on Monday to work out a strategy and prepare a paper to be given the same day to the government as Economic Coordination Committee of the cabinet is scheduled to meet on Tuesday in Lahore.

Unexpectedly, the business leaders who spoke in the meeting were calm and offered rationale for the position they took on various issues.

There were no fireworks and more than half a dozen business leaders who spoke urged the government to realise that the industry was in real distress and at stake are ‘thousands of jobs’ and billions of dollars foreign exchange earnings.Conceding that oil, gas and electricity distribution companies, too, were engaged in business like them, the business leaders plea was that there should be a certain established framework within which the tariff should be reviewed and any change in the tariff should not be abrupt.

“The industry should be given at least a minimum of six months to adjust itself for any upward tariff revision,” one of them said as his argument was that “it takes a minimum of three to six months to book an export order and then to go for production and finally the shipment.”

A hosiery manufacturer and exporter told the meeting: “If the increase in tariff is made abruptly after we have booked export orders on the basis of prevailing tariff of gas and electricity tariff and bank rates, the whole economy of our business gets upset.”

On cash subsidy, the businessmen now consider it a duty drawback compensation for increase in production cost from the government policies.

“It is wrong to say that the government gives industry a subsidy support,” a textile exporter declared who said the production cost has gone up because of inconsistent government policies.

The abrupt change in bank rates, gas and electricity tariff and depreciation of rupee exchange value has pushed up the production cost which needs to be compensated.

Depreciation of exchange value of rupee has given 5.5 per cent advantage to Pakistan industry in export, but has impacted more severely in terms of rise of cost of imported inputs and the effects of rise in bank rates, utility tariffs and transport charges.