Short power, gas supply dwarfs industrial growth

Kazi Zahidul Hasan

The concurrent power and gas crises have compelled the industries to cut down their output drastically, dwarfing the growth of the industrial sector.
“The present power and gas crises are not only causing huge operating loss to the industries but also hampering the sector’s growth… The industries are being compelled to make additional investment to procure and run generators to remain operative,” said an industry insider.
Industry owners said at present factories cannot utilise full production capacity, which is ultimately reducing the competitiveness of local products in the global market.
“Industrial growth will be severely affected as the ministry concerned has decided no to give any new gas connection in next two years,” Annisul Huq, president of FBCCI told The News Today on Wednesday.
Industrialists said textile, jute and garment sectors have been the worst suffers from the inadequate power supply.
Presently industries are contributing 28 per cent to the country’s total GDP (gross domestic products) and the government has projected 40 per cent contribution by 2013.
The FBCCI chief was sceptical about the government’s ability in generating additional energy in next 3-4 years.
“I think the government’s target for meeting the enhanced industrial output in the GDP by 2013 would very tough due to the power shortage,” Huq remarked.
The growth of industrial output declined in the fiscal year 2008-09 to 5.92 per cent whereas it was 7.21 per cent in fiscal year 2007-08, according to a survey.
“The downward trend of industrial out put is mainly responsible due to power shortage,” said experts.
The fast industrial expansion has taken place in the last two decades in the country, led by the RMG and textile sector has been creating 15-20 per cent additional demand to the industrial sector.
The massive expansion of industry has already led to an acute shortfall of gas in the country since late 2007, with the daily demand now hovering around 2200 million cubic feet (mmcf) against a supply of around 1900 mmcf, said a Petrobangla official.
Textile and garments industry, which are the main pillars of the country’s economy are the worst sufferers of the present energy crunch.
Industrial belts at Mirpur, Savar, Ashulia, Gazipur, Tangail, Joydevpur, Mouchak, Kaliakor, Tongi industrial belts and Naryangonj and Chittagong, Mukterpur of Munshiganj are suffering huge gas crisis at the moment as the government failed to supply uninterrupted power supply to the area.
These industrial belts are facing power cut and low gas pressure around 6-9 hours a day, said industry insiders.
“Factories and mills in the industrial belts are getting only 6.60-PSI gas on an average whereas it needs 15 PSI to run the production,” they added.
“Output of textile industry declined by almost 40-50 per cent due to the inadequate gas supply and low pressure of gas,” told Abdul Hye Sarker, president of president of Bangladesh Textile Mills Association (BTMA) to The News Today recently.
He said textile mills are witnessing power cuts around 9-10 hours a day, causing serious production loss as well as efficiency of manufacturing units.
“The industry is incurring around Tk 8.0 crore lose in daily basis and longevity and efficiency of the machineries are seriously hampered due to the country’s erratic power situation,” he added.
More than 80 per cent of Bangladesh factories and power plants are fired by locally produced gas, which is projected to diminish from 2011 and the entire reserve would run out by 2014-2015 at current consumption rate, told a senior official of energy ministry to The News Today on Wednesday. “The fast depletion of reserves is mainly responsible to face sudden halt of gas to the power plants and industrial units,” he added.
He also said the country’s mounting energy crunch fears that factories could face an abrupt closure if local gas supply runs dry.
“Our domestic reserve is drying fast. The government should go for massive exploration by investing huge money so that the gas-fired factories and power plants don’t face shutdown,” he added.
Many industrial units that could not go into operation or business expansion due to gas crisis would also be the targeted clients, he said.
Acute gas crisis has already forced Petrobangla to halt supplies to new industrial units. The state-owned energy giant also suspended operation of three gas-guzzling fertilizer factories in order to divert supply to power plants.
“Loss-making mills, whose management partly blame lack of power supply for un-profitability, have withheld wages for months at present, which could spark workers unrest in the days to come,” said experts.
“Industrialisation of the country has been facing serous setback as foreign and local investors are not showing their interest for industrial expansion as well as new investment due to erratic power situation,” told Wali Bhuiyan, president of Foreign Chamber and Commerce and Industry (FICCI).
“Besides, investors are shaky to expand their existing units for uncertain power situation,” he added.
He also said that the government have to take immediate decision leaving of paper work for the sake of the country.
Criticizing on the government the election manifesto he said it would be very tough to implement such programme if the country’s power situation could not be improved.
Meanwhile, the Bangladesh Garments Manufacturers and Exporters Association (BGMEA) said RMG industries are needed around 620 mw power in daily basis.
Against the demand it has been getting 375 MW power from the government sector having a supply shortage of 245 MW.
“Inadequate power supply has been pushing production cost of the export-oriented RMG sector by Tk 600 crore per year, cutting the competitive edge of the sector,” said BGMEA president Abdus Salam Murshedy.
He said to fight against the frequent power outages most of the garment units in the country have resorted to diesel generators and this has upped their cost of production.

Source: newstoday-bd