Pakistan’s textile sector, which makes up around 60 per cent of the total export earnings, has reported they have started losing international orders due to regional competitors and new investment and expansion plans have been jeopardised in the wake of government’s decision to cut gas supplies for power production to their individual units.

The government offered them an alternate to get electricity from the national grid system, as the country is facing acute gas shortage but has power production capacity in surplus. The industrialists, however, do not trust the fragile power distribution system. Besides, power from the national grid stands over 85 per cent expensive compared to own production using gas-fired power generators better known as captive power plants (CPPs).

All Pakistan Textile Mills Association (APTMA) stated, the CCOE’s (Cabinet Committee on Energy) decision of moratorium on gas/RLNG supply to captive power plants (CPPs) of the export-oriented sector will result in regressing the export sector outlook and put a break to any future expansion or investment. Given the past performance and frequent breakdown, the industry does not have faith that the power sector will be able to deliver on a sustained, stable and competitive basis.

The previous decision of CCOE to reduce power prices to 7.5 cents to encourage mills to shift to the grid was not implemented, and the decision to impose a gas supply moratorium for captive power of EOUs (export-oriented units) will result in an increase of over 10% in the costs of export orders, APTMA said in a statement.