LAHORE: Textile mills announced on Wednesday to observe a countrywide strike on Aug 7 against what they called ‘unjustified’ surcharges worth Rs200 billion on electricity and gas bills and the government’s failure to address basic issues hurting textile production and exports.

Speaking at a press conference, All Pakistan Textile Mills Association (Aptma) Chairman S.M. Tanveer observed that the strike may be extended, if rulers did not resolve the issues.

“Today’s general body meeting has given us the mandate to go for the closure of textile mills throughout the country on Aug 7 as high cost of doing business has led to closures,” he said.

Aptma members from Karachi, Multan, Faisalabad and Peshawar participated in the meeting which deliberated the issues of cost of doing business, unjustified surcharges in electricity bills, enforcement of the Gas Infrastructure Development Cess (GIDC) and imposition of punitive taxation on the export-oriented textile industry.

Tanveer told reporters that the six-month long efforts to resolve issues proved futile.

“The textile industry had lost its viability, as 35 per cent production capacity is being utilised and investments have become stagnant and exports are falling,” he said.

“A theft surcharge has been imposed on electricity bills for industry and Rs3.60 has been added to per unit of electricity which now costs Rs14. The mills cannot afford this tariff. How can we compete with regional competitors, like India and Bangladesh where industry pays Rs8 per unit for electricity?”

Tanveer claimed that more than 60pc power-looms did not operate after Eidul Fitr and now garment units were also closing down.

He said that the textile industry was operating at 10pc negative margin for the last two years and was unable to procure raw material, pay electricity bills, keep the employment intact and pay taxes due to liquidity constraints.

He said the textile industry would have to suffer extra financial load — between Rs175 and 200bn including Rs38bn for GIDC — after the imposition of taxes and surcharges.

Tanveer also criticised the government for not reimbursing the sales tax refunds to the textile mills.

He said Pakistan’s textile exports have fallen down from a level of $13bn a couple of years ago despite the GSP-Plus status.

Published in Dawn, July 30th, 2015

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