Thar coal: Pakistan trying to win back World Bank loan

The bank withdrew from project in 2009 due to environmental concerns.

Hafeez Tunio March 23, 2012


The federal government is preparing a report for the World Bank to show that coal is a “least cost option” and convince the bank to re-engage itself in the Thar coal and energy project, said the provincial law minister in the Sindh Assembly.

Earlier, the World Bank had withdrawn from its commitment of providing $30 million in loan for the Thar coal project.

In the question-answer session on Thursday, Sindh Law and Parliamentary Affairs Minister Ayaz Soomro said the World Bank in a sudden and abrupt move told the government in November 2009 that it was not in a position to continue with the Thar coal and power project because of environmental reasons.

Soomro, who was responding to queries on behalf of Chief Minister Syed Qaim Ali Shah who also heads the Coal and Energy Department, said the Sindh government then approached the federal government, asking it to take up the matter with the World Bank.

Many lawmakers belonging to the ruling Pakistan Peoples Party and Muttahida Qaumi Movement asked a host of questions why the government had so far not been able to generate electricity from coal and where did the money go.

“We have been in the government for the last four years, but no tangible results have come out so far,” said Jam Tamachi Unar, Chairman Public Accounts Committee of Sindh Assembly.

Soomro also accepted that though memoranda of understanding (MoUs) had been signed with different companies over the last five to seven years, no company could start coal mining and power production. Reasons behind this were non-serious attitude, dearth of infrastructure, lack of incentives, low coordination between provincial and federal governments and failure to resolve tariff and coal pricing issues.

Soomro said the government had entered into joint ventures with Engro Group, China-based Global Mining Company and others in four blocks of Thar.

In addition to these, the provincial government has created Sindh Coal Development Fund with Rs5,000 million for injecting its share of equity.

For financing, a joint venture project has been included in the list of projects under the Pak-China Energy Working Group, which will meet on April 15, he said.

To another question, the minister replied that work had started on a transmission line and constructing other infrastructure, including roads.

About constructing railway lines in Thar, he said Pakistan Railways in collaboration with the Thar Coal and Energy Board had given task to Pakistan Advisory Consultancy Services, a subsidiary of railways, to conduct a feasibility study for laying railway tracks up to the Thar coal field.

“An amount of Rs21.9 million has been allocated in the budget,” he said, adding the government had already declared the Thar coal field as a special economic zone and a project of national security.

Published in The Express Tribune, March 23rd, 2012.


Attif Abbas | 9 years ago | Reply

Pakistans biggest problem is corruption and non existance of a political/democratic instituion. Funding this project won't make any development as soon it will become like Railway,PIA,SM etc and then we will be talking about privatization. If Pakistan deals with its top problems,generating funding through equity markets from abroad Pakistanis won't be an issue.

Day-Dreamers | 9 years ago | Reply

First thing about the world bank refusal for funding the Coal Project. This very un-fair as the WBG has funded several projects in Australia, Indonesia, and the likes. It is time we should be ready for some one from Pakistan economic economic policy expert as Dr. Qaiser Bengali to be a candidate to the world bank leadership as President of the World Bank. Today there is a row world wide for the bias towards an American should always not be the head of World Bank. Ideally this project is so feasible the WBG would love to finance/fund the project on merits. Now if there is or are things beyond merit, nothing can be done.Thar Coal will change the life of the country. Look at any stock market and see the situation about coal.

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