Textile associations warn of closure of units

Daily Times, Pakistan
KARACHI: Major textile associations of the country have warned of closure of large-scale textile industry because of gas rates hike for captive power plants.

Representatives of all major textile associations at a meeting at All Pakistan Textile Mills Association (APTMA) house Wednesday expressed serious reservations over the gas rates hike and termed it an unwise decision on part of the government in the backdrop of prevailing situation of the textile sector.
House was unanimous in its opinion that raise was not sustainable and would result in closure of the textile industry, spokesman of APTMA stated and added that some members demanded the textile leadership to call for complete closure, as it will eventually happen if the current rates prevail.
Meeting resolved to engage the government in urgent dialogue for capping the gas rates to as on 30th June 2014.
Furthermore protest be lodged for continuous discrimination against textile sector and enhancing disparity by increasing rates applicable for textile sector viz industrial consumer and captive power, whereas there has been no increase in same end use i.e. for Independent Power Producers (IPP). Moreover, rates for captive power of fertilizer factories has been increased by 31 percent as against 68 percent for textile sector. The House also resolved and authorised the forum to take legal course, if need be, against this discrimination.
Besides, increase in large-scale import of textile finished goods as a result of closure of local textile industry thereby putting further pressure on foreign exchange reserves as well as non performing / default of bank loans and endless litigation arising out of issues related to closure.
Participants of the meeting decided that government be advised that the textile sector can no longer bear the cross subsidy being given to other gas consumers including fertilizer factories and domestic consumers. The rates applicable to textile sector, after removing cross subsidy and taxes should be notified and till then the rates prevailing on 30th June’ 08 be capped for textile sector. staff report