Impact of Energy Crisis on Industries of Pakistan: A Case of Khyber-Pakhtunkhwa Industries

Abstract

Electricity energy  crisis croppoed up in 2009 due to widening gap in demand and supply of power in Pakistan  due to declining production and increasing demand resulting from growing population and economic activities. Resultantly the industrial poduction is worsely affected due to frequent power supply shortage which is still a serious challenge to development economists and power suppliers. Also adversly affected quality of production of industries which operate on delicate material.  No doubt most of the industries have since established their own energy production units yet the cost of production has further added to difficulties. This discourages enterpreneurs and retards industrial growth. This study examines and quantifies the socio-economic impact of electricity outages in the “Hayatabad Industrial Estate” Peshawar, Pakistan. In order to identify multi-dimentional impact experienced by industries i.e. extra cost of energy generation including maintenance cost of additional power generating equipments, inevitable extra shift/ hours engagement, for production and sales, target acheivements etc an intensive study was made  by collecting data through face to face interview. The primary data was collected through questionnaire for the analysis of the study. A cluster that is “Hayatabad Industrial Estate” was selected as it is one of the large and old  industrial estate of KPK. This study encompasses 374 companies of Hayatabad Industrial Estate Peshawar, Pakistan as a sample representing all industries of the Khyber Pakhtunkhwa. Total cost of electricty outages is considered to be the sum of direct and indirect cost. The paper suggests that as an urgent measure the existing installed capacity be enhanced by upgrading the power production equipments. Immediate measures be taken to minimse silt deposition in all the three dames by silt clearing. To save energy from wastage illegal connection and stealing be checked through stern action by the state authorities. In the mean time solar energy system be encouraged by subsidisng the solar systems particularly for industrial installation. This study will quantify the financial impact of load shedding and bring in the knowledge of all stakeholders specifically the government to help them expedite the remedial actions.