CALL FOR SAVING MILLIONS OF INDUSTRIAL WORKERS FROM JOBLESSNESS

KANWAL SALEEM
Jan 05 - 18, 2009

Aggravating law & order situation in the country coupled with record inflation and electricity and gas crisis have closed the year 2008 on a negative point. The traders and businessmen have warned that if immediate attention is not paid to improve the business environment in the country, the situation may become out of control.

Small traders were of the view that power outages, deteriorating law and order and poor sales have made year 2008 the worst year in the last 30 years for small traders and businessmen. The year 2008 commenced with a bad note, as the whole country went in to shock and mourned the death of former premier Benazir Bhutto who was assassinated December 27, 2007. Businesses remained closed during the first week of January 2008, especially in Sindh which was badly disturbed by incidents of torching heavy vehicles containing goods, besides damage to banks and other

properties. The cost of doing business has gone exorbitantly high and as a result, numerous businesses are working under-capacity, many industries have closed down and several have decided to close. Chaos in trade and commerce sector will not only decrease revenue for the government but also lead to massive unemployment.

The outcome of escalating problems of trade and industry would be in the form of dwindling growth and worsening of lifestyle of the common man, experts warned. The episode of violent protests of power loom workers at Faisalabad should serve as an eye opener for the government. People on the other hand have started cursing the government as well as utilities providers for long hours of load shedding of electricity and gas. The situation further deteriorated with shortage of petrol in different cities like Lahore, Faisalabad and Rawalpindi.

TRADE AND BUSINESS REMAIN UNFORTUNATE IN 2008

Businessmen including Mian Faraz Alam and Shamim Akhter told Pakistan and Gulf Economist that trade and business remained low throughout the year (2008), down at least 60 per cent mainly owing to power outages. "The year 2008 was the worst year in the last 30 years for businesses. Power breakdown was the major impediment that affected business environment," they stressed. Still, power failures are the biggest threat to businesses and "one cannot expect growth in this situation," they added. They further said that the cost of doing business also increased, as power outages pushed up fuel charges amid high utility prices.

CALL FOR SAVING MILLIONS OF INDUSTRIAL WORKERS FROM JOBLESSNESS

Pakistan Industrial and Traders Associations Front (PIAF) Chairman Irfan Qaiser Sheikh asked the government to save millions of industrial workers from losing their jobs as non-availability of gas and acute shortage of power is causing closure of a large number of industrial units.

Irfan Qaiser Sheikh said that the government would have to reset its priorities, as the present circumstances are forcing the industrialists to close down their business. All over the world the industry is given priority but in Pakistan the situation is altogether different, he added. He further said that the violent protests in Faisalabad should be an eye-opener for those who were sitting at the helm of affairs because it was just the beginning and it could take an ugly turn in coming days. He said that PIAF was planning to convene all Pakistan Trade Bodies conference in coming days to evolve a joint strategy to cope up with ongoing energy crisis.

Irfan Qaiser Sheikh also criticized the OGRA for increasing the rates of gas in the country. He said that the industry was already facing tremendous pressure and the recent increase in the prices would prove last nail in the coffin.

CEMENT PLANTS OPERATED AT 59% CAPACITY

Cement plants of the country operated at 59 per cent capacity in December 2008 as compared to 61 per cent in December 2007, the lowest monthly utilisation recorded after February 2004 at 55 per cent. However, total utilization levels for the first half of fiscal year 2008-09 (1HFY08-09) was recorded at 74 per cent against 75 per cent in the corresponding period of previous year, market sources said.

ECONOMIC MELTDOWN CONTINUES TO OBSTRUCT CONSTRUCTION ACTIVITIES

The ongoing economic meltdown continues to obstruct construction activities across the board causing low expenditure of cement in the country. The cement sector concluded last month of 2008 with continued miserable domestic sales performance by observing 13 per cent year-on-year (YoY) decline at 1.29 million tonnes. The cement demand is likely to remain under pressure, as the cement utilisation would continue facing strong headwinds as high interest rates, medium term liquidity crunch and cut in infrastructure spending would obstruct construction activity of the country.

POWER SITUATION LIKELY TO IMPROVE BY JANUARY END

Pakistan Electric Power Company (PEPCO) spokesman said that the power situation is likely to improve in the country by the end of January 2009. Around 2,000MW electricity would be sustained within a month, which would ease the power position, the spokesman said. He said 300MW Chashnup Power Plant at Chashma is also expected to join in and would commence generation from January 17, which was closed due to maintenance work. Additionally, PEPCO has to arrange alternate power against 550MW of lost power due to continued non-availability of gas to the two rental plants of 250MW capacity located at Bhiki and Sheikhupura (near Lahore), the 210MW Gas Turbine Power Station (GTPS) at Faisalabad and 90MW machines of the Kotri Power Station near Hyderabad.

In order to resolve the power crisis 546MW electricity has been added with the system during 2008, which includes 300MW on account of efficiency enhancement of existing PEPCO, GENCOS plants, 81MW Malakand-III hydro project and 165MW Attock Power and others.

HIKE IN GAS TARIFFS FLAYED

Industry as well as general public criticised the Oil and Gas Regulatory Authority (OGRA) for increase in gas tariffs.

They said that OGRA and NEPRA are playing havoc with the common man and the business community. After rise in electricity tariff, now at the outset of 2009, the increase in gas tariffs has created commotion as it will result in further hike in CNG and electricity tariffs, they said.