KARACHI, May 6: Power failures have paved the way for three economic activities — massive surge in the import bill of power generating machines to over half a billion dollars in just nine months, manufacturing of uninterrupted power supply (UPS) in cottage units and thriving smuggling of emergency lights.
On the other hand, rising power utility bills have pushed up the demand for energy savers in which smugglers now hold 40 per cent market share as compared to 60 per cent official imports.
With no immediate solution in sight to control lingering power failures, such commercial activities will continue to thrive till the power suppliers keep on playing hide-and-seek.
Market players say that Chinese generators, emergency lights and energy savers have provided much relief to the consumers otherwise, they have to rely on costly products. They say if the power utility companies and the government would have made practical efforts in increasing power generating capacity by installing new power plants such parallel economic activities would have not been generated that inflicted a blow to the foreign exchange reserves from generator’s import bill followed by official imports of emergency lights and energy savers.
UPS: Those who cannot afford to have generators and look for noiseless generating activity – UPS (uninterrupted power supply) can be a good alternate to handle the power crisis.
However, market players say that the increasing demand in the last two years has opened new avenues for some people who have set up cottage industries for its manufacturing in Karachi. Till last year, UPS was arriving from Lahore.
In absence of any official data of sale figures and production, it is hard to give the exact number of manufacturers and country’s yearly demand. Some traders say the UPS price has increased by Rs500 from the last year while others say the price hike ranges between Rs500 to Rs1,000.
Dealers say the prices vary in different localities. The UPS including battery with a capacity to store and run two fans and two bulbs costs around Rs9,500; for three tube lights and three fans the price comes to Rs10,500 while the UPS with batteries to run four fans and four tube lights costs Rs12,500. All these prices include installation charges.
A dealer said this year the demand had been high because of deepening power crisis in the city. Some dealers are offering six months to one year guarantee for UPS transformers while others are not ready to offer anything. Clever battery makers, who have been enjoying a field day because of tremendous boom in the local auto production in the last few years, are now cashing the situation on the UPS front. They have already reduced the battery guarantee to six months some 18 months back while continuing to increase the prices.
The only negative point in the UPS is the high cost of battery depending on ampere power. Buyers have to arrange a new battery next year so that UPS could perform for three to four hours efficiently. Acquiring a UPS means that a customer will get a relief for three to four hours in times of power failures.
OTHER GADGETS: Chinese emergency lights are in high demand these days and according to the Chairman of Pakistan Electronic and Electrical Manufacturers Association, Abdul Khaliq Jafarani, 40 per cent of the demand is met through smuggling as 55 per cent cumulative impact of duties and taxes encourages vested interest players to flood the item in the local market through illegal channels.
Because of the inflated power bills, consumers have shifted towards energy savers and an estimated four to five million pieces are being sold every month in the country.
Mr Jafarani said the government had increased the import duty from 10 to 15 per cent in the last year’s budget. The total incidence of taxes and duties comes to 42 per cent, which encourages smugglers to cash the situation. He said energy savers could save 40 per cent energy cost as compared to regular bulbs. Instead of providing any benefit to this sector, the Customs had increased the valuation rates by 64 per cent a few weeks back which pushed up the rates of energy savers in local market. He urged the government to reduce the import duty and sales tax so that smuggling could be controlled and consumers could benefit.
GENERATORS: Buyers are out in the market to beat the heat at any cost and shops are now packed with huge imported stocks.
Figures of Federal Bureau of Statistics reveal that imports of power generating machines in July-March 2006-2007 rose by 43 per cent to US$516 million from US$362 million in the corresponding period of 2005-2006.
Karachi consumes about 40 per cent of total generator imports while 60 per cent accounts for the rest of the country. Dejected consumers are now certain that there is no relief in sight from the government in handling the power outages issue and generators have become an integral part of their life.
However, it is believed that if Chinese low-priced generators would have not landed in the markets the generators’ import would have not thrived meteorically. However, the market share of Chinese generators has dropped from last year’s 85 to 90 per cent to 60 per cent this year while the market share of Japanese generators, which used to be 10 per cent last year, has surged to 20 per cent due to increase in imports.
At present, the markets are flooded with four varieties of Chinese generators (A, B, C and D) and consumers have a wide choice to select the brand as per their pocket output. However, buyers from the rich class prefer sound-proof Japanese generators.
A good quality 2KVA Chinese generator (petrol) can be purchased at Rs10,000 as compared to Rs30,000 (Japanese made). A 5KVA Chinese generator is priced at Rs30,000 as compared to Rs80,000 for Japanese brand. A 10KVA Chinese generator sells at Rs100,000 as compared to Rs210,000 for Japanese product.
In diesel category, sound-proof Chinese generator of 5KVA carries price tag of Rs50,000 as compared to Rs175,000 for Japanese brand. A 12KVA generator is priced at Rs160,000 as against Rs380,000 for Japan made.
A 5KVA gas generator of Chinese brand costs Rs50,000 while Japanese brand with the same capacity costs Rs110,000. A 2KVA Chinese gas generator is available at Rs20,000 while Japanese generator costs Rs34,000.
Around 70 per cent market share was enjoyed by petrol generators because of low price followed by 15 per cent each by gas and diesel generators.