Thar coal project: With progress stalled, Sindh chief minister lodges protest
Prime minister’s directives remain unimplemented; project hits roadblocks.
The power ministry and the finance ministry argue that sovereign guarantees can only be issued after clearance of the project from the ECC. PHOTO: FILE
ISLAMABAD:
Sindh Chief Minister Syed Qaim Ali Shah has lodged a protest with the federal government for the latter’s failure in enforcing a multibillion dollar Thar coal supply agreement with power plants. The coal supply agreement had been okayed by the prime minister himself.
In a special board meeting of the Thar Coal Energy Board (TCEB), chaired by Prime Minister Raja Pervez Ashraf on October 3, 2012, it had been decided that all existing oil-based power plants and new coal-based plants would be designed or converted according to Thar coal specifications.
According to the minutes of the meeting, another decision taken during the meeting concerned a coal off-take agreement between power generation companies and the Sindh Engro Coal Mining Company, for the existing 420-megawatt (MW) Jamshoro Power Plant as well as the new 600MW power plant in the same locality. It had been decided that the agreement must be finalised and signed within one week from the date of the meeting.
It had also been decided that a sovereign guarantee for financing the debt portion of the Thar Block-II Mining Project, amounting to $600-700 million, will be provided by the government, subject to approval of the Economic Coordination Committee (ECC).
However, no progress has been made since the meeting in implementing the decisions of the premier.
The water and power ministry had claimed that the Asian Development Bank (ADB) was not ready to finance Thar coal-based power plants. However, the Council of Common Interests (CCI), in a meeting held in the last week of January 2013, has cleared a new 600MW power project at Jamshoro. The plant will use a mix of imported and Thar coal and will be set up with a $900 million loan from the Asian Development Bank.
“ADB now seems ready to finance the Thar coal project,” sources said, adding, however, that some issues still need to be resolved.
“The government has decided to convert all furnace oil-based plants to Thar coal, however, some plant operators are not ready to follow the decision, saying that mining of Thar coal will take time,” sources said.
They said that imported coal similar in specification to Thar coal could be used until mining commences.
The prime minister, in the meeting of the CCI, took notice of the slow progress on earlier directives to the water and power ministry that it enter into an agreement with TCEB, and directed that the arrangement be finalised within seven days. Prime Minister Ashraf also directed the Ministry of Finance to immediately process the Sindh government’s request for the provision of sovereign guarantees.
“Prime Minister Raja Pervez Ashraf was scheduled to hold a meeting in Karachi with the Sindh government on Thar coal last week, but the meeting was postponed due to some reasons,” sources said.
“The implementation of decisions regarding Thar coal is still pending, which has embarrassed the Sindh chief minister,” sources said, adding that Shah has complained, in a letter written to the federal government, that some ministries are creating hurdles in the materialisation of the Thar coal project.
The power ministry and the finance ministry argue that sovereign guarantees can only be issued after clearance of the project from the ECC.
Published in The Express Tribune, February 5th, 2013.
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Sindh Chief Minister Syed Qaim Ali Shah has lodged a protest with the federal government for the latter’s failure in enforcing a multibillion dollar Thar coal supply agreement with power plants. The coal supply agreement had been okayed by the prime minister himself.
In a special board meeting of the Thar Coal Energy Board (TCEB), chaired by Prime Minister Raja Pervez Ashraf on October 3, 2012, it had been decided that all existing oil-based power plants and new coal-based plants would be designed or converted according to Thar coal specifications.
According to the minutes of the meeting, another decision taken during the meeting concerned a coal off-take agreement between power generation companies and the Sindh Engro Coal Mining Company, for the existing 420-megawatt (MW) Jamshoro Power Plant as well as the new 600MW power plant in the same locality. It had been decided that the agreement must be finalised and signed within one week from the date of the meeting.
It had also been decided that a sovereign guarantee for financing the debt portion of the Thar Block-II Mining Project, amounting to $600-700 million, will be provided by the government, subject to approval of the Economic Coordination Committee (ECC).
However, no progress has been made since the meeting in implementing the decisions of the premier.
The water and power ministry had claimed that the Asian Development Bank (ADB) was not ready to finance Thar coal-based power plants. However, the Council of Common Interests (CCI), in a meeting held in the last week of January 2013, has cleared a new 600MW power project at Jamshoro. The plant will use a mix of imported and Thar coal and will be set up with a $900 million loan from the Asian Development Bank.
“ADB now seems ready to finance the Thar coal project,” sources said, adding, however, that some issues still need to be resolved.
“The government has decided to convert all furnace oil-based plants to Thar coal, however, some plant operators are not ready to follow the decision, saying that mining of Thar coal will take time,” sources said.
They said that imported coal similar in specification to Thar coal could be used until mining commences.
The prime minister, in the meeting of the CCI, took notice of the slow progress on earlier directives to the water and power ministry that it enter into an agreement with TCEB, and directed that the arrangement be finalised within seven days. Prime Minister Ashraf also directed the Ministry of Finance to immediately process the Sindh government’s request for the provision of sovereign guarantees.
“Prime Minister Raja Pervez Ashraf was scheduled to hold a meeting in Karachi with the Sindh government on Thar coal last week, but the meeting was postponed due to some reasons,” sources said.
“The implementation of decisions regarding Thar coal is still pending, which has embarrassed the Sindh chief minister,” sources said, adding that Shah has complained, in a letter written to the federal government, that some ministries are creating hurdles in the materialisation of the Thar coal project.
The power ministry and the finance ministry argue that sovereign guarantees can only be issued after clearance of the project from the ECC.
Published in The Express Tribune, February 5th, 2013.
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