With zero allocation, Thar project close to being left high and dry

Employees look at possibility of unemployment commencing September

HYDERABAD: With a sharp reduction in funds in fiscal year 2015-16 and zero allocation this budgetary year, government’s much touted Thar underground coal gasification (UGC) project has been left high and dry.

While its promising power generation capability remains far from being harnessed, the employees after having worked for several years confront the outlook of either continuing their jobs without pay or being laid-off.



“We are left with hardly enough funds to manage salary payment for two months,” Dr Muhammad Shabbir, managing director of the project, told The Express Tribune.

The federal budget for 2016-17 did not allocate funds for the project, which is headed by nuclear scientist Dr Samar Mubarakmand. In the previous financial year [2015-16] only Rs300 million, from Rs1.2 billion earmarked for the project, were released, according to the MD.

Mubarakmand clarified that the government had not formally conveyed that the project is being shelved.

The pilot power production of 8 megawatts began in May, 2015. But the project’s commercial production of 100MW, as per the original plan, is yet to obtain the government’s nod of approval.

Another employee, who requested anonymity because he is not allowed to speak to the media, said that the administration has tacitly conveyed that they will not be able to pay us beyond September. “We have come to know through sources that a Rs40 million tender for a rig has been stopped so that salaries for one or two more months after September can be paid from this amount,” he told The Express Tribune.

Around 250 people are employed in the project and a majority of them live in the project’s colony in Islamkot taluka of Tharparkar district. A sum of up to Rs17 million is spent on the salaries, in addition to expenses on running the generation plants, residential colony and meeting other expenditures.

UGC project

The UGC project was approved in 2010 with a funding of Rs8.8 billion to produce 100 MW of electricity. It soon hit a snag and the funds as well as the generation target were drastically slashed.

But, the UGC team slogged through the financial bottlenecks and after years of striving got approval in 2014 for the pilot power generation of 8MW, the production of 5MW began in May, 2015. Presently, the UGC is producing around 1.5MW to meet the project’s electricity requirements.



In the last six years only around Rs3 billion have been released while the project cost has increased due to the delay.

The underground coal gasification refers to the process of turning the coal into synthetic gas or syngas without open pit mining of the resource.

According to the MD, the electricity will cost between Rs6 to Rs7 per unit at the current cost of production. “It’s much cheaper than the cost of power generation from open pit mining.”

Published in The Express Tribune, July 15^th, 2016.

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