A Reuters file image.
KARACHI: The Towel Manufacturers Association of Pakistan has urged the government not to impose debt servicing surcharge on the industry, especially on the export-oriented sector, as the textile industry is already facing a financial crunch due to tax refunds withheld by the Federal Board of Revenue.
“We appeal to the govt to avoid putting further financial burden on the industry, especially the export-oriented sector,” said Muhammad Haroon Shamsi, Senior Vice Chairman of the Towel Manufacturers Association. “The government should adopt corrective measures and put the responsibility of inefficiency on the entire power sector, rather than on consumers.”
According to media reports, the Ministry of Finance has made amendments to the National Electric Power Regulatory Authority (Nepra) Act under the Finance Bill 2020 and is trying to get it passed before July 1.
The amendments are aimed at empowering the regulator to pass the cost of inefficiency of the power sector on to consumers by imposing the debt servicing surcharge.
The benchmark for transmission and distribution (T&D) losses was 4.3% on a yearly basis, but the Nepra report for 2018 showed 20.4% T&D losses, which meant the losses were five times higher as compared to the benchmark, Shamsi said.
On the other hand, the benchmark for Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) in terms of unaccounted for gas (UFG) was 7.3% but both the gas utilities recorded UFG losses of 12-13% on a yearly basis.
He pointed out that the industrial sector was the main victim of the Covid-19 pandemic but only the industrial sector could reduce the adverse impact of coronavirus on the national economy.
As economic activities had come to a halt or slashed by 50% in the current scenario, the government should take some special measures to help the manufacturing industry flourish. “The export industry is already paying a high cost of utilities as compared to regional countries,” said the senior vice chairman of the association.
Despite that, he added, the government had time to time imposed different types of charges through utility bills including the fuel adjustment charges, additional fuel adjustment and other charges on the export industry.
“Now, the government is going to make amendments to the Nepra Act to pass the cost of inefficiency of the power sector on to consumers through the debt servicing surcharge.”
Published in The Express Tribune, June 25th, 2020.
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