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Concern over duty free imports of energy saver lamps

August 25, 2012

Islamabad, Aug 24: The Engineering Development Board has expressed concern over duty free imports of Compact Fluorescent Lamps (CFLs) that could harm the local manufacturers of energy savers, Dawn has learnt.

The concern was raised keeping in view government’s decision to distribute free imported 30 million CFLs.

Documents available with Dawn show that the Engineering Development Board, Ministry of Industries had written to the concerned government departments including Federal Board of Revenue (FBR) and the National Energy Conservation Centre (Enercon) how duty on energy saver lamps be restored to save local manufacturers.

The documents said that duty on the import of Energy Saver Lamps (ESL) was waived keeping in view the energy crisis in the country. However, since the local industry has developed the technology and capacity to manufacture energy saving lamps and the three manufacturers had the installed capacity of around 150 million units per annum, the Engineering Development Board proposed that import duty on ESL may be restored at 10 per cent from the existing zero percent.

To safeguard the interests of the local manufacturers, the EDB went as far as recommending discontinuing concessionary import of energy saving lamps.

The Engineering Board pointed out that some importers were misusing the concession by importing parts in two or three pieces at cheap rates. The parts were fixed together by pasting and these bulbs of un-certified quality were being sold in the local market at low rates.

These unbranded, non-tested, and low quality products were affecting the local industry in the organised sector, besides defeating government policy to encourage real time manufacturing of the ESL.

In the copies sent to FBR, the Engineering Board reminded that the government had assured the industry to impose 10 per cent custom duty on import of energy saving lamps in the budget 2008-09.

In the one page letter, also available with Dawn, the FBR had said that to protect local manufacturers, the government had also decided that Wapda would procure the whole domestic production of energy saving lamps at a price inclusive of 10 per cent duty for free distribution under the prime minister’s 100 days programme.

Enercon and Ministry of Water and Power’s stance echoed along similar lines when it drew attention towards India’s Bachat Lamp Yojna Programme started in February 2009 for distribution of low priced energy savers but supported local manufacturers.

“Pakistan’s strategy to distribute free energy savers is all about imports instead of asking local manufacturers to produce high quality bulbs unlike India’s Bachat Lamp scheme,” said Manager Technical Enercon, Asad Mehmood.

Without a safe disposal mechanism of energy saver bulbs, he was also apprehensive that Pakistan might not be able to benefit from Clean Development Mechanism.

“CLF bulbs are gradually being phased out world over because of the harmful mercury content. If the government intends to distribute 30 million free CLFs, it must know that these bulbs carried carbon footprints and to avail carbon credits, it must have a safe disposal mechanism of CFLs,” said Asad Mehmood.

Hamid Ali Khan who was monitoring the programme as Joint Secretary, Ministry of Water and Power explained that energy savers were still not being manufactured in Pakistan.“There is probably only one local energy saver company that had approached the Ministry to show an interest in selling bulbs at low prices,” said Hamid Ali Khan.

However, there were no local manufacturers at the time the policy to distribute free bulbs was designed, Hamid Ali Khan said.