Businessmen reluctant to set up own power units

[LahoreEstate]

Incessant power outages and breakdowns are compelling more and more people to purchase generators. On the other hand sellers are taking advantage of the demand situation to fleece customers. - Online photo


KARACHI: Despite the deepening power crisis, caused by the pathetic performance of KESC, the business community in the metropolitan did not switch over to private power solutions in larger numbers in the industrial estates, except for one industrial estate.

The prohibitively high cost of standby generators does not allow business community, driven to the wall by long outages, to switch over to captive power system which is still cheaper than regular supply from KESC despite increase in gas prices.

However, they offer multiple reasons of businessmen’s reluctance to set up captive power units, and one of the reasons is that standby generators cost double the price of the power of KESC.

‘The standby generators cannot be run for longer durations as they make a big difference in input cost,’ said a businessman.

Representatives of various industrial associations offer different views on the cost factor of private and public power supply.

They say standby generators are used in emergency or for meeting deadlines for exports in case of disruption in power supply from KESC.

F B Area Association of Trade and Industry chairman Idris Gigi said, out of 2,200 units in the area, 65 per cent, have standby generators while five and six units have captive power units.

He was of the view that diesel generators cost Rs16 per unit depending on power generation load, while KESC’s tariff ranges between Rs7.5 and 8.0 per unit.

SITE Association of Industry chairman M A Jabbar said of the 3,000 units, 200 to 300 have standby generators. Around 50 to 60 have captive power units which run on gas.
He opined that diesel generators cost Rs10 per unit while KESC charges range between Rs7 and 8 per unit.

Due to high cost of running standby generators, exporters can run generators for a maximum of two to three hours a day.

He said there was a major difference in the cost of power from KESC or from captive power plants.

Korangi Association of Trade and Industry chairman Mian Zahid Hussain said out of 4,000 units in Korangi, around 15 to 20 per cent have standby generators, while around 100 run their mills on captive power.

He thought that generators cost Rs17 per unit while KESC charges Rs9 per unit.
He claimed that captive power facility is definitely much cheaper than KESC.

Landhi Association of Trade and Industry senior vice chairman Dawood Usman Jhakoora said, out of 2,000 units in the area, around 50 run on captive power while 100 to 200 have standby generators. However, small and medium-sized units hardly have generating units.A member of the Supreme Council of Traders Imran Saeed Baghpati said 30 per cent traders in local markets have their own power generating units.

Alliance of Market Associations chairman Atiq Mir said ten to 15 per cent small traders own power generators of low capacity, while 90 per cent of food restaurants have standby generators. Besides, almost 100 per cent big store chains have generators. He said in case of three hours load shedding daily, it is hard for traders to bear an additional cost of Rs100 to 200 to buy petrol daily.

Pakistan Machinery Merchant Group president Khurram Saigol said import of generators in terms of value would cross last fiscal year’s figure due to a big difference in rupee-dollar parity. Import had become costlier as dollar is equal to Rs81 as compared to Rs60-62 last year.

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