| Sino Coal, Engro Pakistan to work on Thar coal project |
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| Thursday,September 25,2008 Posted: 17:25 BJT(0925 GMT) |
| From:Daily Times Article type:Reproduced |
ISLAMABAD: Sino Coal, a Chinese company and Engro Pakistan Limited have agreed to work jointly for exploiting the Thar coal reserves for power generation, a senior official told Daily Times on Tuesday.
He said that during the visit of Pervez Musharraf to China, Sino Coal expressed interest for investing in Thar coal reserves for power generation. Now, during the upcoming visit of president Asif Ali Zardari to China next month the issue of investment by Chinese company in Thar coal reserves would be finalised. Amidst the energy crisis in Pakistan the current government is pursuing the policy to exploit Thar coal reserves that could help generate cheaper power as compared to thermal and hydle power generation.
He said that the current government had allocated Rs 500 million in the current financial year 2008-09 Public Sector Development Programme for Thar coal infrastructure development. Federal government has directed the Thar Coal authority to complete the bankable feasibility study within six months time that would help mining of the coal reserves and determining the tariff of coal based power plants. He said that the said bankable feasibility study would cost $15 million that would be generated from financial institutions like World Bank and Asian Development Bank.
In this regard, Thar Coal Task Force was formed in 2001, headed by former President Musharraf to carry out a Thar mining bankable feasibility study. The fate of this report on which upfront tariff for coal-based power generation was to be based, remains a mystery. Official said that without a credible bankable feasibility, no international investor of merit would show interest in the project.
Chinese Company, Shenhua was ready to build the integrated mining and power generation complex at a guaranteed power tariff of 5.75cents per unit but NEPRA refused to pay more than 5.34 cents. The Chinese company packed its operations in Pakistan and went back to China leaving no good sign for the investors interested in coal based power plants.
The row between Sindh and NEPRA still persists, as NEPRA has allowed indicative tariff of 7.5 cents per unit that was earlier not ready to grant 5.75 cents per unit. However government has abolished the Sindh Coal Authority to end the row over the tariff issue and now government has formed Thar Coal Authority over which Sindh government has shown serious concern. Thar Coal Authority has been formed to attract investment for coal mining and coal gasification at Thar and other areas in the Sindh for power generation. Chief Minister Sindh is the Chairman of the authority while Vice Chairman is Federal Minister for Water and Power and Deputy Chairman Planning Commission is its deputy Chairman.
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