ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) has lauded the move of the government to sign a basic agreement with the Independent Power Producers (IPPs) to reduce power tariffs and provide cheap electricity to the end consumers.
The ICCI termed it a highly positive development that would help bring down cost of doing business and facilitating growth of business activities.
Muhammad Ahmed Waheed, President ICCI said electricity cost in Pakistan was very high which was a major cause of high production cost making our exports uncompetitive in the international market, said a press release.
He said high power tariff was also a discouraging factor for the potential investors as capital always moved towards the destinations where manufacturing cost was quite reasonable.
He hoped that the agreement of the government signed with IPPs would pave way for reviving business activities and attracting more local and foreign investment in the country.
ICCI President said power generated through expensive fossil fuel has the highest share in our energy mix and significant depreciation in the value of rupee against Dollar has made great increase in energy cost due to which growth of industry was facing severe problems.
He said Pakistan has great potential to generate cheap electricity through hydro and other renewable sources and stressed that government should focus on enhancing share of cheap power sources in its energy mix that would facilitate accelerated growth of business and investment activities and put the economy on the path of sustainable growth.
Muhammad Ahmed Waheed said Transmission and Distribution (T&D) losses in Pakistan were quite high as compared to international benchmark and to cover these losses, successive governments always resorted to the easy solution of increasing power tariffs for commercial and domestic consumers, but this approach has produced harmful consequences for the economy.
Therefore, he urged the government for bring drastic reforms in power companies to improve their performance and reduce their T&D losses.
He urged the government to consider privatization of power companies that would bring healthy competition in energy sector as has been witnessed in the banking and telecom sectors.
He said privatization of power companies would ultimately lead to the improvement in their companies and generation of electricity at competitive rates that would produce multiple benefits to the economy.