Thar coal power projects

Islamabad: A committee constituted by Prime Minister Muhammedmian Soomro has termed the upfront tariff set by the National Electric Power Regulatory Authority (Nepra) for Thar coal power projects far below the international bidding benchmark, official sources reportedd on Tuesday.

Headed by the Minister for Petroleum, the committee comprises Planning Commission Deputy Chairman, Minister for Water and Power, Water and Power Secretary, Petroleum Secretary, Private Power Infrastructure Board (PPIB) Managing Director, Wapda Chairman, Sindh Mines and Mineral Development Secretary, and former Sindh Chief Secretary Aslam Sanjrani.

The committee met on January 31, 2008 to remove, on fast track basis, the hurdles for Thar coal-fired power plants, which faced several years delay due to difference of opinion between the federal and provincial governments.

Serious resentment has been conveyed by the Sindh caretaker Chief Minister in a letter to the caretaker Prime Minister, accusing federal agencies of creating hurdles in starting the project.

The Prime Minister has been apprised that utilisation of Thar coal reserves would initially generate up to 20,000 MW by 2019. After threadbare discussion, the committee decided to develop coal-based power projects above 1000 MW to make them more viable economically.

When a question was raised by one of the participants as to who would utilise coal produced by the Thar Coal Mining Company (TCMC), the committee discussed it in detail and decided that the coal would only be consumed by Wapda for power generation, sources said.

Deliberating upon the issues like the procedure to award the contract of the project, the committee decided that PPIB would undertake International Competitive Bidding (ICB) for the projects to be developed in the private sector, but the tariff devised by Nepra would not be considered as the benchmark, sources added.

Tariff pro forma and bidding mechanism related to tariff in RFP would be finalised by PPIB in consultation with Nepra and Pepco, sources quoted committee as developing consensus on the proposal. In order to meet water requirements of the power projects of up to 20,000 MW in Thar coal field, Sindh government would prepare a PC-1 for construction of a canal/conduit and would ask the federal government for funding as well as allocating additional water from the irrigation system.

OTHER DECISIONS OF THE COMMITTEE WERE AS FOLLOWS:

1) PC-1 for infrastructure improvement, especially roads, would be submitted by Sindh government.

2) Provincial government would also prepare and send PC-1 for drainage and utilisation/disposal of subsoil water to facilitate mining operations.

3) Sindh government would provide top security to the project's personnel and equipment.

4) Petroleum Ministry would make efforts to arrange gasification at Thar.

5) The committee directed the Petroleum Ministry to appoint MD TCMC immediately so that work could be started.

6) NTDC would expedite construction of transmission lines for power distribution from Thar.

Sources said that Nepra was in the process of revising, upward, upfront tariff of Thar coal power projects from 7.8 cents per unit to above 10 cents which was expected to be finalised next week.