KARACHI: Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani has expressed grave concern over the government’s decision, made under the IMF’s agreement, to suspend gas supply to Captive Power Plants (CPPs) by 2025.

If not reconsidered, this decision will lead to a widespread closure of medium and large-scale industries, causing the loss of significant investments in these plants, Mr Bilwani warned on Wednesday.

The government must immediately engage the International Monetary Fund to withdraw this condition. Otherwise, this would cause irreparable damage to the economy and lead to mass closure of industries, the KCCI chief said in a statement.

He pointed out that the government had previously encouraged the business community to establish CPPs, assuring supply of uninterrupted gas to run these power plants as the country was going through severe electricity crisis at that point in time. This encouragement led to significant investments in CPPs, which are 64 per cent more efficient than IPPs as Combined Cycle CPPs use the heat emitting out of power plants to run heat recovery boilers for generating steam, whereas the emission of boilers is utilised for generating hot water.

“Not a single industrialist will be able to bear the shock of CPPs closure due to gas suspension as it is a well-known fact a large number of industries simply cannot depend on K-Electric’s inconsistent and completely unreliable power supply, which often disrupts several types of sensitive machinery and halts the entire production process for hours due to fluctuations of a few seconds”, he said.

Mr Bilwani said CPPs are currently producing 600-800 megawatts of electricity which, the industry fears, cannot be provided by KE because of its limited production. He asked whether the government intends to give industries free electricity connections instead of CPPs.

“With an 80:20 ratio, indigenous gas is supplied to CPPs at Rs3,000 per mmBtu whereas the RLNG is provided at Rs3,788 per mmBtu. But if the CPPs are closed, the industrial gas will either be diverted to the domestic sector or the IPPs at Rs1,500 permmBtu, which is going to be more problematic as the government will have to bear additional subsidies in addition to enhanced line losses,” he feared.

Published in Dawn, October 3rd, 2024