Pakistan textile units due to high cost of utilities relocating

YarnsandFibers News Bureau 2017-01-18 11:00:00 – Karachi

The National Assembly’s Standing Committee on the Textile Industry was informed by the representatives of the value-added textile sector on Tuesday about a number of factors that have put the country’s exports at risk. Also a large number of textile units have either shut down or relocated to regional countries due to a high cost of utilities.

The committee members, led by Haji Muhammed Akram Ansari, passed a resolution that asked all heads of utility companies and the secretary of the Ministry of Water and Power to attend the next meeting, which will take place within a month in Islamabad.

Speaking on the occasion, Pakistan Apparel Forum (PAF) Chairman Jawed Bilwani said that the textile industry has been struggling due to a high cost of doing business. Pakistan’s textile exports in the last three years dropped 9.22 percent to $12.4 billion

The industry representatives said that electricity tariffs in Pakistan stand at $0.11 per kWh while the industrial gas tariff is 173pc. Even the minimum wage in Pakistan is 98pc, 17pc and 19pc higher than those in Bangladesh, India and Vietnam, respectively.

The committee members were informed about the disparities in tariffs of gas, power and water within provinces. If Punjab is paying high gas tariffs, the Karachi-based industry is also bearing a high cost of water. The industrial water tariff in Karachi is 357pc and 507pc higher than those in Punjab and Balochistan.

With regard to the latest relief package announced by the prime minister, the industry leaders said that it may not fully produce the desired results. The government need ensure level playing field with regional countries to grow exports. As some of it will be absorbed by the high cost of doing business while another portion of it will end up being shared with foreign buyers.

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