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KCCI urges PM, Energy Minister to refrain K-Electric from charging ISPA

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March 18, 2020: President Karachi Chamber of Commerce & Industry (KCCI) Agha Shahab Ahmed Khan, while welcoming Prime Minister Imran Khan’s announcement of a committee established to assess the economic impacts of the coronavirus and suggest helpful measures, stated that the business community highly appreciates PM’s resolve towards revival of the economy.

He also appreciated the PM’s resolve towards his concerns over the biggest impact on the exports and businesses but a recent untimely move by K-Electric in which the utility service provider has demanded Industrial Support Package Adjustment (ISPA) from the industries in Karachi, is totally contrary to Prime Minister’s assurances.

In a statement issued, Agha Shahab, while strongly criticizing K-Electric for demanding unwarranted ISPA retrospectively, urged Prime Minister Imran Khan and Federal Minister for Energy Omar Ayub Khan to refrain K-Electric from demanding ISPA as the business & industrial community of Karachi is already in deep crises due to global shut down of all the economic activities caused by the outbreak of coronavirus.
He pointed out that the wheels of global economy have come to a complete halt due to destruction caused by coronavirus and the negative impact is clearly visible in Pakistan’s economy as well hence in such circumstances, it was an ill-timed move on part of K-Electric to demand hefty ISPA charges retrospectively from the industries in Karachi which the entire business & industrial community highly deplores and rejects. “Retrospective demand of ISPA is unjustified as the products were manufactured and sold on the prices based on Industrial Support Package (ISP) received during July-December 2019. ISP was a support package for industrial consumers and cannot be withdrawn without consultation with stakeholders”, he added.

He said that due to slowdown and closure of economic activities all around the world, the export and import businesses in Pakistan were also terribly suffering due to slowdown in clearance, arrival and dispatch of shipments from and to some of the major markets including the United States and European Union while the payments from foreign buyers have also been put on hold, resulting in creating severe liquidity crunch for the industries. Moreover, the local demand has also reduced drastically, creating a very challenging situation for hundreds of industries who are finding it difficult to overcome their operational expenditures and even pay salaries to thousands of employees.

In such a situation, K-Electric’s decision to take ISPA charges retrospectively from industrial consumers was not less than a bomb that would completely destroy many industries, particularly the small industrial units and factories who were already somehow managing to pay the fuel adjustment charges but with the addition of ISPA charges, the electricity bills would become unaffordable that simply cannot paid hundreds of industries, he said, adding that closure of industries and factories would create a very serious situation as thousands of people would become jobless.

He mentioned that the decision to charge ISPA was implemented by the government in June 30, 2019 and all the DISCOS implemented it with effect from July 1, 2019 except K-Electric. “Was K-Electric asleep as they should have also implemented it immediately and the industries could have also devised strategies to pay these charges on monthly basis in normal circumstances. It is highly unfair to demand ISPA retrospectively as the industries cannot afford such a huge financial burden particularly when the economic and industrial activities have completely clogged in Pakistan and around the world due to the virus.

Agha Shahab reiterated that it was impossible for the industrial consumers to pay such hefty charges which must be immediately withdrawn otherwise, the business & industrial community would widely protest against K-Electric’s unjust demand as it would lead to closure of industries, particularly the small scale industries and factories.

Press Release

Posted on: 2020-03-18T17:49:00+05:00