Appointment: Thar coal contractor to be shortlisted this month
Four Chinese EPC contractors being evaluated.
The total cost of the project, which involves digging out 3.8 million tons of coal annually and using it to generate power, is estimated at $1.7 billion. DESIGN: FAIZAN DAWOOD
KARACHI:
The contractors for Pakistan’s first integrated Thar coal mining and power project will be shortlisted by the end of this month, said Shamsuddin A Shaikh, the chief executive officer (CEO) of Sindh Engro Coal Mining Company (SECMC) on Wednesday.
“Four Chinese EPC contractors are being evaluated for the purpose,” he said during a media briefing on the much anticipated project, which will add 660mw of power to the national grid by 2017.
The company has already started initial work at the mine site, located 360km from Karachi, by removing two metres of sand. The hired contractor will start the work on the open-pit mine by end of 2014.
The total cost of the project, which involves digging out 3.8 million tons of coal annually and using it to generate power, is estimated at $1.7 billion. But the financial close of the project is yet to be done.
However, Shaikh believes there won’t be any problems with the financing, which is mostly coming from Chinese financial institutions.
“This is the most feasible project since we will use our own coal. No one can predict how the price of imported coal will behave in future,” he said, recalling that Pakistan had set up oil-based thermal power in the 1990s on assumption that the price wouldn’t fluctuate drastically.
“But that is exactly what happened.”
“The fact that Prime Minister Nawaz Sharif along with former President Asif Ali Zardari attended the ground breaking of the project together a few days back has added to its credibility,” he said.
The project is based on 75:25 debt-to-equity ratio. The company envisages raising $900 million from Chinese banks, $300 million from a Pakistani banking consortium and the remaining $400 million from sponsors.
The Sindh government has already transferred $100 million to a special account. Another $50 million will be transferred later, and Engro will arrange $150 million along with some other business groups.
Published in The Express Tribune, May 8th, 2014.
The contractors for Pakistan’s first integrated Thar coal mining and power project will be shortlisted by the end of this month, said Shamsuddin A Shaikh, the chief executive officer (CEO) of Sindh Engro Coal Mining Company (SECMC) on Wednesday.
“Four Chinese EPC contractors are being evaluated for the purpose,” he said during a media briefing on the much anticipated project, which will add 660mw of power to the national grid by 2017.
The company has already started initial work at the mine site, located 360km from Karachi, by removing two metres of sand. The hired contractor will start the work on the open-pit mine by end of 2014.
The total cost of the project, which involves digging out 3.8 million tons of coal annually and using it to generate power, is estimated at $1.7 billion. But the financial close of the project is yet to be done.
However, Shaikh believes there won’t be any problems with the financing, which is mostly coming from Chinese financial institutions.
“This is the most feasible project since we will use our own coal. No one can predict how the price of imported coal will behave in future,” he said, recalling that Pakistan had set up oil-based thermal power in the 1990s on assumption that the price wouldn’t fluctuate drastically.
“But that is exactly what happened.”
“The fact that Prime Minister Nawaz Sharif along with former President Asif Ali Zardari attended the ground breaking of the project together a few days back has added to its credibility,” he said.
The project is based on 75:25 debt-to-equity ratio. The company envisages raising $900 million from Chinese banks, $300 million from a Pakistani banking consortium and the remaining $400 million from sponsors.
The Sindh government has already transferred $100 million to a special account. Another $50 million will be transferred later, and Engro will arrange $150 million along with some other business groups.
Published in The Express Tribune, May 8th, 2014.