Syed Raza Hussain, President of the Federal B Area Association of Industries (FBATI), has called on the government and relevant authorities to expedite the release of allocated funds for the incremental benefit subsidy on electricity for Karachi’s industrial units, particularly Small and Medium Enterprises (SMEs). This action is crucial to prevent the closure of large-scale economic activities and layoffs within the city’s commercial and industrial sectors.
Hussain highlighted that while power subsidies have been granted to industries in other cities, Karachi has only received Rs. 9 billion out of an allocated Rs. 42 billion intended to alleviate the economic impacts of COVID-19 from FY20-23. The subsidy program was disrupted due to disagreements between industries and K-Electric (KE). KE requested that the federal government first release the funds to their account, while the government directed KE to release the funds first and then recover them as reimbursement.
This dispute has created an uneven playing field, with Karachi industries facing electricity costs that are Rs. 20 higher per unit compared to other cities. As a result, Karachi’s industries have been operating at a loss, attempting to maintain their market presence despite the financial strain. Currently, NEPRA has instructed K-Electric to disburse the remaining allocated funds to Karachi’s industries following a tribunal decision in favor of the industries. Hussain noted that rising electricity costs have led to reduced industrial production and economic activities in Karachi, contributing to layoffs in various industrial zones. The immediate transfer of these subsidies is expected to help revive industrial production and economic activities. Hussain also urged Federal Minister for Energy Owais Leghari and Minister of State Muhammad Ali to address this issue urgently.
