No further concession: Gas infrastructure cess to stay, says textile minister

Published: June 28, 2014
Email
Aptma has been repeatedly pressing the government to withdraw GIDC, arguing the tax will increase the cost of production of export goods. PHOTO: FILE

Aptma has been repeatedly pressing the government to withdraw GIDC, arguing the tax will increase the cost of production of export goods. PHOTO: FILE

KARACHI: 

Federal Textile Minister Abbas Khan Afridi has asked the textile industry to switch to coal instead of banking on gas as their main source of energy as the latter is not only in short supply but is also going to be expensive in coming years.

“The gas that you are getting will only become costly in coming years. Though the government is issuing gas exploration licences swiftly, to enjoy a reliable source of energy you should shift to imported coal,” he said.

He was talking to members of the All Pakistan Textile Mills Association (Aptma) at its head office here on Friday.

The minister said in categorical terms that the gas infrastructure development cess (GIDC) would not be taken back from the textile sector.

In the 2014-15 budget announced earlier this month, the government increased GIDC from Rs100 to Rs300 per million British thermal units, triggering an industry-wide outcry. Later, the cess was revised downward and varying rates were set for the gas-consuming sectors.

The minister’s stance caught the textile millers off guard who were expecting to win his support in the industry’s favour.

“I cannot give you any commitment on GIDC because it is quite difficult for the government to withdraw it,” Afridi said.

Aptma has been repeatedly pressing the government to withdraw GIDC, arguing the tax will increase the cost of production of export goods and leave the exporters uncompetitive against major regional rivals such as China, India and Bangladesh.

They say high energy tariffs have stymied their growth and the increase in GIDC will compound the problems. Energy has an overwhelming share in the business cost and the rise in GIDC will make it tough for the industry to compete in the international market, they say.

Defending the levy, the minister stressed that the country was experiencing an acute gas shortage and despite granting new exploration licences, the consumers may not get enough supplies in the next couple of years.

The government had already awarded more than 50 licences to oil and gas exploration firms for the search of hydrocarbons in different parts of the country and it desired to issue 200 more permits by year-end, he said.

Discussing emerging opportunities for the exporters in the world market, Afridi pointed out that a sharp rise in wages of Chinese workers in recent years would divert global textile orders from China to other regional states. “Pakistan can benefit from this changing scenario,” he remarked.

Afridi said law and order was a major issue for Pakistan and the government was undertaking steps to eliminate it as soon as possible. “We hope law and order will improve by the end of this year.”

Training programmes

Speaking on the occasion, Aptma Chairman Yasin Siddik announced that the Ministry of Textiles and Aptma would launch a joint training programme for which the ministry would nominate five trainees for every member of the textile millers’ body. Aptma has about 400 members across the country.

“We hope that through the skill development programme, the interns will be able to get good job opportunities in the industries,” he added.

This training programme is in addition to the skill development plan that the textile ministry is going to implement from next month under which it aims to train 120,000 people over five years. The trainees will get four to six-month training with a stipend of Rs8,000 per month.

According to Afridi, the ministry has earmarked a huge amount of Rs4.5 billion for the skills’ development programme.

Published in The Express Tribune, June 28th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

More in Business