HAL fails to submit feasibility study for power project

Islamabad: The Private Power Infrastructure Board (PPIB) has prepared a charge sheet against Hasan Associates Limited (HAL) for not submitting feasibility study for a 1000 mw integrated coal mining and power project at Thar, official sources told Business Recorder.

The representatives of HAL are scheduled to meet Water and Power Ministry Secretary Ismail Qureshi on Monday to apprise him about the hurdles being created by the PPIB. Giving the background, sources said that HAL had intimated on October 20, 2006 that it was interested to set up an integrated 1,000 mw power plant based on Thar coal.

However, HAL failed to pre-qualify on the basis of having less net worth than what was required. However, the Prime Minister at a meeting had directed that Petroleum Ministry, the Sindh government, and PPIB should facilitate Hasan Associates within the realm of reasonableness in the development of the project.

The PPIB Board in its meeting on May 8, 2007 approved issuance of Letter of Interest (LoI) to HAL. Accordingly, a LoI was issued on August 27, 2007 with validity of 24 months ie up to September 9, 2009. HAL had also got a lease for Block-I of Thar coalfield by signing a Memorandum of Understanding (MoU) with Sindh Coal Authority (SCA) on January 11, 2007.

Pursuant to the LoI, the HAL started conducting feasibility study, and submitted an in-house feasibility study in early February 2008, which was reviewed by a Panel of Experts (POEs), which expressed dissatisfaction on the quality of the in-house feasibility study, and said that the document could not be termed as 'first draft of a bankable feasibility study'.

On April 15, 2008, HAL reported its intention to select GHD of Australia for conducting the feasibility study for the project. However, on April 29, 2008, the firm reported that the Australian company had declined to accept consultancy due to Australian government's travel advisory to Pakistan.

Sources said that the firm has not succeeded in engaging a consulting firm to conduct the feasibility study, and the actual work on the feasibility study is yet to commence.

Earlier, on March 25, 2008, the PPIB requested HAL to intimate a suitable date for holding third POE meeting, but HAL requested to postpone the meeting.

On July 30, 2008, the PPIB again requested the sponsor of the project to propose a suitable date for the POE meeting, but it again declined to meet the panel of experts.

Business Recorder tried to contact Farooq Hasan for his comments on the charges levelled by the PPIB, but there was no response till the filing of this report.