Electrical Capital Good Industries & their Survival

By Engr. Ishtiaqul Haque

Consultant & adviser to CEO

M/s Validus Engineering Pvt Ltd.

The electrical capital good’s industries existed in Pakistan since early 1950’s which have provided thousands of jobs to engineers, technical graduates and skilled workers. We were also exporting many engineering goods and services to the middle-east and other countries.

In the past few years, electrical Capital Good Industries in Pakistan are facing multidimensional challenges. Their products are facing high competition from goods and equipment manufactured in China. The Pakistani industry needs to study in detail about the factors affecting their competitiveness. Thousands of engineers are passing out from our universities and are unemployed or under employed.

Pakistani industries are mainly lacking in the research and development (R&D) activities. The R&D activities of the manufacturing engineering field are not up to the mark and do not meets today’s requirement. The law & order situation in Pakistan as well as in the industrial hub city, Karachi is also one of the key factor for aggravating the environment. R&D activities demands a conducive peaceful environment, to utilize the time and money being spent on human resource development.

In the late seventies the public & private industries had a system to induct fresh engineering university graduates as “Trainee Engineers” for 12-18 months. They used to work as “on job” training and transferring of knowledge from senior engineers was a continuous process. In public sector WAPDA, K-Electric, Pakistan Steel, Shipyards, PTCL were leading organization to induct trainee engineers. In private sector; Siemens, AEG, Phillips, National Refinery and similar organizations were inducting regularly fresh graduates as trainee engineers. Thus the trained manpower were available regularly to industries, participating in the R&D activities within the organization and  which  also leads to low unemployment among the engineers & skill worker. With the passage of time due to their hard work as well as skill and knowledge they also reached to the top positions of the organization. This was equally applicable in public and private sector industries / organizations. Similar schemes were applicable for skill worker development in the industries through implementing apprenticeship scheme ordinance 1962.

In the last one decade, hiring of new trainee engineers are being neglected in many organizations and   industries. The government created new organization for skill development in the country to fill the gap of trained manpower   but it is not successful despite huge investment from public fund.

The result is we are losing our competitiveness in various manufacturing areas. Furthermore, Various FTA (Free Trade Agreements) is also becoming a bottlenecks as industries bottom lines are under pressure which has reduced the fiscal space required for the training and development of human resources within industries and organization.

Many known industrial group are now shifting their focus and resources in real estate business, as ROI in industrial products are very low. The industry has to face many challenges with respect to productivity, efficiency and output as well as high cost of doing business

In general the productivity and output in electrical capital goods industries are very low as compared to Chinese worker. One of the major component of cost of doing business is the low output as compared to competition we are facing in various areas.

The China Pakistan Economic Corridor (CPEC) is the very important project of Belt & Road initiative (BRI) of Beijing, which is very important for Pakistan as well as for the region. However, this investment is not yet providing any support to local engineering industries. All the products & services are brought from China, thus the local value addition is very low as compared to potential exist in Pakistan.

We value our long friendship with China and their support in all critical time. But we must study and identify the reasons of our low value addition in power sector projects constructed under CPEC financing and support. This will help in taking corrective action and create win – win situation for China & Pakistan.

The electrical engineering capital good industry needs full support to play their genuine role in the development of the country and increasing more job opportunities for the local workers and engineers.

All stake holder needs to focus to enhance the job opportunities for young engineering and technology graduates. Following actions are suggested

  • The government should give incentives to industries who are contributing in the skill development and investing by inducting young trainee engineers.
  • The local engineering consultant should be given a preference role even with the joint venture or as consortium partner with foreign consulting firm even for foreign funded projects executing in Pakistan.
  • High quality human resource development in the industries / organization should be a continuous activity which should be supported by fiscal policy and tax incentive at federal and provincial level.
  • The industrial law should also focus more on productivity, efficiency and output apart from job guarantee.
  • Engineering goods & services available locally should be used in all projects in Pakistan.
  • Implementing of SRO 827 provision in all public & private sector projects.
  • Export incentive being provided by china to their Industries needs to study carefully in order to create level playing field for local industries. This is more important for local industries survival.