Gas outages: The human cost of Punjab factory shutdowns

Thousands rendered jobless, unable to fend for themselves or their families.

ISLAMABAD: Saeed Ahmad, a 38-year-old daily wage worker at a garment factory in Faisalabad, is struggling to pay for his expensive hepatitis-C treatment and feed his three children, as his factory remains shut for an average of 12 days a month in the wake of massive gas shortages in the province.

Ahmad is among thousands of daily wagers across the country facing hardships and trying to grapple with lengthening working hours and decreasing income. He may still consider himself lucky because he is so far not among thousands of workers who have been laid off after owners simply closed factories or reduced the number of working shifts from three to two.

Because of an increase in demand and reduction in gas production, Punjab, the largest province and home to textile mills, is subject to an average of three days a week industrial shutdown.

Provisional data compiled by the Pakistan Petroleum Information Service show that in November, gas production stood at 3.8 billion cubic feet per day, which is five per cent less than the output in November last year.

The government has worked out a gas shortage of 1.2 billion  cubic feet per day on the basis of a daily gas production of 4.3 billion cubic feet. Further 12 per cent erosion in estimated gas production is resulting in unannounced supply cuts.

According to conservative estimates, Pakistan is likely to suffer a loss of at least $500 million in textile exports because of gas outages in Punjab. The amount is equivalent to the third pending tranche of the Accelerating Economic Transformation Programme of the Asian Development Bank, linked with power sector reforms.

Textile manufacturers, however, estimate the loss to exceed $1 billion.

“The textile sector’s value-added chain has been the hardest hit. Factories are sacking three-fourths of their workforces,” said Musthaq Cheema, a former textile minister. “I myself have had to lay off 4,000 workers because my factory is running at half its (production) capacity,” Cheema, who is also a mill owner, said.

Foreign customers, Cheema said, were reluctant to place orders with factories based in Punjab, where 90 per cent of the value-added chain is located.

He said that the gas is actually cut every three days a week, instead of the officially-sanctioned “load-shedding” of two days.

Textile sector contributes one-tenths in the total gross domestic product (GDP) growth and is a source of over 55 per cent foreign exchange earnings.

The sector employs almost four-tenths of the country’s total workforce.

Official statistics show that during July-October period of the current financial year, Pakistan exported $4.2 billion worth of textile products, which are 57.9 per cent of total national exports.

The government plans to increase textile exports to $25 billion by 2014 under a five-year textile policy, which also talks about a 100 per cent increase in employment in the sector.

“The gas supply cut is causing a loss of between $500 million and $800 million a month and endangering 1.5 million jobs”, said Gohar Ijaz, Chairman of the All Pakistan Textile Mills Association. He said within three months, gas load shedding would cause at least $1.5 billion loss of exports.

Published in The Express Tribune, December 16^th, 2010.