Industries rid of peak-time power rates

In major relief package, SMEs given 50% discount on additional power use, all industries 25%

ISLAMABAD:

Prime Minister Imran Khan on Tuesday unveiled a major power bill relief package for industries with extra incentives for small and medium businesses, doing away with peak-hours charging and slashing the tariff on additional electricity consumed.

The premier announced the package accompanied by members of his economic team after a meeting of the federal cabinet.

Under the package, all industries will be exempted from peak-hours charging for the next three years.

Small and medium enterprises using additional power than their consumption in their previous bills will be given a discount of 50% on extra units till June 30 next year.

In addition, all industries will be provided electricity at a discount of 25% on the additional units they use based on their previous bills for the next three years.

In his address, the prime minister said that the package would increase exports and boost the higher manufacturing capacity of domestic industries.

"We have decided that from November 1, small and medium industries using additional power as compared to their previous bills will be provided electricity at 50% of the rate till June 30, 2021," he added, highlighting the features of the package.

The premier explained that if the small and medium enterprises were buying electricity for Rs16/unit, they would now have to pay Rs8/unit for the additional power they use. Furthermore, the government will review the decision after June 2021.

Announcing the decision to do away with peak-hours charging for the industries, PM Imran said there would no longer be "off-peak hours".

“There will be off-peak hours all the time,” he added.

The prime minister maintained the cost of electricity in the country was expensive as the previously signed power generation contracts were expensive and "had a negative effect" on the country.

He added that the government, soon after coming to power, had tried to increase exports as “wealth generation is directly related to exports”.

“Pakistan is the only country in the subcontinent, after Covid-19, that has progressed rapidly and at the same time, we have been largely spared the adverse effects of this pandemic.”

Acknowledging the pandemic’s impact on the country’s services sector, the premier said: “It is extremely important to bring industrialisation to the country and the purpose of this is to increase wealth creation in order to rid ourselves of the burden of debt.”

PM Imran also appealed to citizens to follow the standard operating procedures (SOPs) for curbing the spread of the coronavirus pandemic, particularly wearing masks outdoors.

However, he said the government would not shut down industries even if the outbreak grew worse. “We will let them [industries] operate with SOPs in place.”

Federal Industries and Production Minister Hammad Azhar, while giving further details about the relief package, said the electricity tariff for industries would no longer increase during the peak hours –from 7pm to 11pm. He noted that for the past many years, the electricity rate would increase by 25% for industries during the peak hours.

The minister elaborated that industries with B-1, B-2 and B-3 connections would be given a discount of 50% on additional electricity till June next year. Besides, he added, all industries would be given a discount of 25% for the next three years on additional electricity consumed.

“It [the relief package] was a tough decision by the PTI government which has now been approved by the cabinet,” he said.

“Many industries are unable to fulfill their orders. This package is important to increase production in order to bring down costs and keep industries running during peak hours.”

The minister said the package would help the country’s industries in becoming more competitive on international and local levels, also having an impact on prices.

Speaking on the occasion, Federal Planning and Development Minister Asad Umar said major decisions on the energy sector had been made over the last few months which made it possible for the government to announce the relief package.

“Pakistan decided to open the economy early and we opted for a strategy of ‘smart-lockdowns’ as we witnessed a decrease in Covid cases and deaths, while economic activity started breathing again.”

He cautioned that the country was now witnessing the coronavirus rearing its head again. “We have to take all those steps which allow us to curb the spread of the virus while ensuring that people's incomes are not affected.”

Finance Adviser Abdul Hafeez Sheikh said achieving the revenue collection target during the first four months of the current fiscal year, the growing exports, the strengthening industry, the current account and primary account surplus and a well-performing stock market indicated that the economy was on the right track.

He added that the country’s debt had not registered an increase over the last four months

Federal Power Minister Omar Ayub said despite the availability of domestic resources, previous governments were running power producing units on 75% imported fuel for their personal gains.

The present government, he added, made signed power production agreements for the use of alternative resources like solar and wind power at the rate of Rs6.5 per unit as against the previous regime’s agreements of Rs24 per unit.

Earlier while presiding over the cabinet meeting, the prime minister issued directions for holding Senate elections through open ballot.

He told the participants of the meeting that electoral reforms are more important than the results of the polls.

“We are making decisions in the interest of the country instead of opting for traditional political gains,” he added.

“I introduced the culture of neutral umpires in cricket. Similarly, there should be no match fixing in elections and the sanctity of the vote is important.”

Federal Minister for Narcotics Control Azam Khan Swati informed the meeting about the steps taken for electoral reforms.

Similarly, Adviser to the PM on Institutional Reforms and Austerity Dr Ishrat Hussain briefed the cabinet about major reforms introduced in different important government entities, including the Federal Board of Revenue, Security Exchange Commission of Pakistan, Pakistan International Airlines, State Bank, Civil Aviation Authority and Pakistan Railways on the recommendation of a taskforce formed for this purpose.

He said the taskforce had held 16 meetings and about 50 consultative sessions since its inception on September 5, 2018.

“Eligible, competent and expert people were appointed in the government entities, which has increased their performance,” he added.

“Under the austerity drive, unnecessary expenditures have been curtailed. Purchase of vehicles and machinery has been reduced and their maintenance cost has also been cut.

The government offices housed in the rented buildings had been shifted to state-owned ones, which has helped in substantial savings.

The cabinet approved granting of powers to the Departmental Working Committee to sanction up to Rs2 billion for planning projects. A mechanism for making the sanctioning process of development projects easier and expeditious was also devised. The Finance Division ensured a process for timely release of funds for the development projects.       It also accorded its approval for appointment and transfer of board of directors in Postal Life Insurance Company Limited under SECP rules.

To expedite the disposal of the telecom sector related cases pending in different high courts and to reduce backlog, the cabinet also approved the establishment of Telecom Appellant Tribunal under the Pakistan Telecommunication (Re-Organisation) Act 1996.

The cabinet gave the nod to a power relief package for the industries under the recommendations of its Economic Coordination Committee and the Committee for Energy. It instructed sending the matter to the National Electric Power Regulatory Authority for the formulation of tariffs.

The prime minister observed that the package would help in enhancement of the industry and increase investment, besides generating employment opportunities and strengthening of the economy.

PM's Special Assistant Dr Faisal Sultan briefed the meeting about the latest situation of the COVID-19 pandemic.

The prime minister said precautionary measures were necessary considering the situation and hinted that the government would not halt business activities so that the wheels of the economy could move on.      The cabinet also approved the Jammu and Kashmir state property budget, which was collected from the rented out urban and agricultural properties owned by the Jammu and Kashmir government inside Pakistan.

 It also granted powers of presiding officers to senior civil judges, and additional district and sessions judges in Gilgit Baltistan under Sector 44 of the PECA 2016.

The cabinet approved the reorganisation of the board of directors of the Pak-Arab Refinery Limited and also gave the nod to appointment of Farah Agha to the board.

According to a statement issued by the PM’s office, the decision is “part of the policy under which the boards of government companies were being made autonomous and free from political influence”.

The meeting also ratified the decisions of its Economic Coordination Committee during its meetings held on October 21 and 29.

#Live:PM @ImranKhanPTI and Federal Ministers expressing their views on energy sector https://t.co/HK33hXtxUa

— Radio Pakistan (@RadioPakistan) November 3, 2020

 

(With input from APP)