Country loses Rs100 billion as a result of the power outage

Textile industry alone booked a loss of Rs7-8 billion

KARACHI: As a result of the statewide total blackout that occurred on Monday from dawn till sunset, the country has suffered a loss of about Rs100 billion in terms of economic activity. The administration received criticism from the business community for the second nationwide power outage in less than three months. According to them, the full-day power outage occurred while the nation was scarcely producing anything at its factories due to a lack of raw materials and a severe financial crisis. Pakistan has recorded an economic loss of around Rs100 billion amid total blackout on Monday,” Karachi Chamber of Commerce and Industry (KCCI) former chairman Muhammad Idrees estimated while talking to The Express Tribune.

He said the size of gross domestic product (GDP) stands at Rs38,000 billion at present. “If one divides the GDP amount by 350-day,” he would come to know the per day production amounts at over Rs100 billion a day. In addition to this, the Federal Board of Revenue (FBR) collects an estimated amount of Rs18-20 billion in taxes every day.

Elaborating, he said he has divided the total GDP side by 350-day, as many industries including textile and entire services sector operate on weekly off days (Sundays) and other holidays as well. They are closed only on a few days like Eid and other Muslim festivals holidays during the year.

He claimed that if industries had run at full capacity as they did in the prior fiscal year 2022 before the recent economic crisis arose, the economic losses would have exceeded Rs100 billion.

According to him, the textile sector alone has reported that the daytime power outage has cost it a loss of Rs. 8–10 billion. This shows that the total amount of losses suffered by the industrial and service sectors are roughly equal to the estimate.

Idrees criticised the administration for the country’s second significant power outage lasting “a full-day” in less than three months.

Tauseef H. Farooqi, chairman of the National Electric Electricity Regulatory Authority (Nepra), visited Karachi after the previous total blackout in October 2022 and asserted that they had built a method that would restore power in two to three hours if it occurred again in the future.

The power outage occurred once more on Monday, and reports indicate that rather than taking two to three hours as promised by the Nepra chairman, the restoration process may take two to three days.

Other businessmen claimed that due to the lack of imported raw materials and the current foreign exchange crisis, Pakistan was already experiencing business losses.

They said the authorities concerned should work to fix the faltering economy instead of making tall claims. “There are stuck up some 6,000 containers at Karachi Port due to non-availability of finance to the business community and many industrial units are lying closed partially or completely,” another businessman said.

He said the central bank has asked businessmen to arrange foreign financing themselves to import goods and buy raw material from international suppliers on a credit of minimum 180-day or more.

He said the solution was not acceptable to the business community, as there were only a few hundred businessmen who can arrange foreign financing themselves and buy raw material on credit. But what about the rest of the thousands of businessmen who cannot arrange the foreign exchange and completely rely on the central bank and commercial banks’ financing for the imports.” He said the situation at ports was because there was no regulator of shipping companies in Pakistan.

He said that the long-pending “Logistic Service Provider Regulatory Authority” measure should be discussed and passed by parliament as soon as possible. The establishment of the authority would facilitate national economic activity.