In Khyber Pukhtunkhwa some 300 industrial units are closed whereas 988 are running much below the installed capacity. Major reasons are location disadvantage from being away from seaports, credit squeeze, and high electricity and gas tariffs. The industrial policy which had been announced by the previous provincial government in May, 2018 envisaged 25 percent rebate to industries in electricity bills from the government’s kitty. But neither new investment came for industrialisation nor could the sick units be revived.
Government now intends to provide inexpensive electricity to industries from the under completion small hydel power stations. But it will not become a reality if provincial government solely relies on power distribution from the national grid. Electricity at preferential tariff cannot be supplied from Pehur hydel power station for the want of local transmission and distribution system under the control of provincial government despite the announcement in this regard by the previous PTI government in Khyber Pukhtunkhwa.
The provincial government has completed power projects of 63 megawatt and a number of projects of 800 megawatt are under completion. The industrial sector of the province cannot benefit from cheap electricity produced by the province until local transmission and distribution system is built and fiscal incentives are provided by the federal government.