KARACHI: Pakistan International Bulk Terminal (PIBT) has decided to increase the capacity of its under-construction coal terminal to 16 million tons per annum (mtpa) with an additional investment of $70 million.
Anticipating demand from coal-fired power plants, the PIBT’s jetty and storage facilities currently under construction had been originally designed to handle 12 mtpa with an estimated cost of $185 million.
The board of directors has now approved its expansion with a new cost of $255 million, 55% of which will be financed by banks, said a company notice issued to the Karachi Stock Exchange (KSE).
The terminal, the biggest of its kind in the country, was expected to be completed by mid-2016 but it remains unclear if the capacity expansion has pushed forward the completion deadline.
“We expect to complete negotiations with banks in the next couple of weeks,” said Marine Group of Companies (the project sponsors) Managing Director and PIBT Director Aasim Siddiqui.
The Marine Group of Companies is owned by Haleem Ahmed Siddiqui, a seasoned businessman and an old-time Muslim Leaguer.
The terminal’s utilisation depends on power plants, which are still in planning stages. The government recently rolled back many of the coal-fired power plants after it found that they were either unfeasible or difficult to finance.
Yet Siddiqui says he is confident that some coal power plants will definitely be built.
“K-Electric is working on switching its Bin Qasim power plant to coal, which would require 5 mtpa. After that we have the Jamshoro Power Plant.”
The Asian Development Bank (ADB) has agreed to loan $900 million to the government to help it switch state-run electricity machines from furnace oil to coal.
The Marine Group also hopes to get into the business of transporting coal through rail.
Last year, before the expansion plan was announced, Siddiqui said that PIBT would sell 5 million tons of coal to cement plants, 3 million tons will be imported for K-Electric and another 5 million tons for two other power plants.
There have been concerns that while coal-based power plants are being promoted vigorously, not enough has been done to arrange for the transportation of coal.
Lucky Commodities, a sister concern of profitable Lucky Cement, is the dominant coal importer with volumes of 1.5 mtpa and plans to increase imports to 20 mtpa by 2018.
Published in The Express Tribune, February 27th, 2015.