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Islamabad allows industrial self-power generation

ISLAMABAD — The Economic Coordination Committee (ECC) of the Cabinet has allowed the industrial sector to go for self-power generation for their own consumption to reduce input costs as well as pressure on power utilities.

The meeting presided over by Prime Minister Shaukat Aziz also advised the State Bank of Pakistan to closely monitor the inflation and brief the ECC on monetary policy, interest rates and inflation on a regular basis.

Dr Ashfaq Hassan Khan, economic adviser to the federal government, told newsmen after the meeting that if inflationary pressure subsided, as expected, the State Bank would revise its current stance on tightening of the monetary policy.

He said the central bank would adjust its policy in the light of inflation but said it could not be predicted at this stage as to when the policy would change again to the accommodative stance.

He said the industries would now be allowed to generate electricity for their own consumption but they would not be allowed to sell electricity to others even in case of surplus.

Sources said the Wapda and KESC had opposed the move because they thought it would deprive them of cream of consumers. However, Mr Khan said all the stakeholders, including Wapda, KESC and Private Power and Infrastructure Board (PPIB) were on board the decision of allowing industries to generate electricity for self consumption.

Inflation at an eight year peak was a major cause of concern for the government. Mr Khan said the discussions on inflation consumed almost 90 per cent time of ECC meeting. He said the inflationary trend had started to decline and sensitive price indicator (SPI) has shown reduction in four out of five weeks since April 14.

He said the prices of five essential items, which have been allowed to be imported from India without duties and taxes, have already come down although the imports have not yet arrived. These items include meat, garlic, tomato, potato and onions.

He said the monthly inflation measured by consumer price index (CPI) was expected to decline on May-over-May basis which had increased in the month of April when compared with April of last year.

He said that the Federal Bureau of Statistics (FBS) has been directed to provide average price trends to the Provincial Chief Ministers along with the federal government to apprise them about the price difference with the other provinces.

The prime minister directed the provinces to review the prices trends on their own and take appropriate measures and federal government will provide them all possible assistance in this regard, Khan maintained.

The ECC also allowed the setting up of a dry port at Sheikhupura to ease pressure on dry ports of Lahore which have been over-burdened with the increase in economic activities. There is a large number of industries in Sheikhupura and a dry port would cater its requirements.