Interview with Mr Shamsuddin Ahmed Shaikh – CEO, Thar Power Project
Shamsuddin Ahmed Shaikh is the Chief Executive Officer (CEO) of Engro Powergen Limited, Sindh Engro Coal Mining Company, Thar Power Company Ltd. Prior to his current position; Mr. Shamsuddin was Senior Vice President at Engro Foods. He is the Chairman of the Board of Directors of Engro Powergen Thar (Pvt) Limited and Engro Powergen Qadirpur Limited while he also serves at the Board of Directors of Sindh Engro Coal Mining Company, Thar Power Company, Engro Powergen Limited; Engro Eximp Ltd & Engro Eximp Agriproducts (Pvt) Limited. Mr. Shamsuddin has an extensive career of 25 plus years in manufacturing, sales, commercial and supply chain at different levels and subsidiaries of Engro Corporation. He did his MBA from Colorado State University, MS in Industrial Engineering and BE (Mechanical) from NED University, Karachi.
While sharing the current status of Thar coal power project and the Engro Coal Mining Company, which has become part of CPEC, Shamsuddin Ahmed Shaikh CEO of the Thar Power project said in an interview that both SECMC and EPTL have completed 12 months of project execution with firm progress on all fronts including major construction activities, overburden removal, infrastructure and community reach initiatives. Mine Construction recorded till May 15th, 2017 was 35.5% actual versus the planned, 32%. The Power Project is also ahead of schedule with overall EPC progress at 22.1% versus the planned, 18.7%.
PAGE: THAR COAL POWER PROJECT IS INCLUDED IN CPEC, WHAT BENEFIT THE THAR POWER PROJECT WILL GAIN WITH THE INCLUSION OF THE PROJECT IN CPEC?
SHAMSUDDIN: CPEC was crucial to the development of Thar Coal as it enabled the projects to achieve financial close and move into execution. With the coal mining industry in its nascent stages in Pakistan and environmental concerns surrounding coal, very limited sources of funding were available to finance the development of Thar.
Inclusion in CPEC provided the project with access to contractors with expertise in mining as well as financial institutions willing to fund the project. Chinese financing has played an absolutely crucial role in the project and 50% of the financing for the project is being sourced from China.
PAGE: WHEN IT IS EXPECTED TO COME ON LINE?
SHAMSUDDIN: Both mining and power projects are expected to achieve commercial operations on 3rd June 2019, 4 months ahead of schedule.
PAGE: PAKISTAN IS A HUGE CONSUMER OF IMPORTED OIL FOR POWER GENERATION PURPOSES WEIGHING HEAVILY ON OUR IMPORT BILL, YOUR COMMENTS ON HOW THAR COAL CAN SAVE PRECIOUS FOREIGN EXCHANGE SPENT ON OIL IMPORTS?
SHAMSUDDIN: Almost 35% of power generation in the country is currently based on imported fuel, according to the state of industry report, 2015 by NEPRA. Such a heavy dependence on imported fuels is neither sustainable nor affordable for an economy like Pakistan with high trade deficit. Thar coal offers immense potential as an indigenous source of energy. Thar is home to 175 billion tons of reserves, the 7th largest coal reserves in the world and the largest untapped reserves.
SECMC has conducted feasibility studies of expansion up to 13.3 Mt/a, which can fuel 2310MW. At this level, annual forex saving will be approximately US$1 billion per year from the power being produced from Block II alone. Furthermore, at this stage Thar Coal will be cheaper than LNG, and imported coal as well so not only will switching generation capacity to Thar Coal with reducing the forex bill but will also provide the cheapest source of energy for Pakistan.
PAGE: YOUR COMMENTS REGARDING POSSIBLE IMPACT OF THAR COAL POWER PROJECT ON THE LIVING STANDARD OF PEOPLE IN THE NEIGHBORHOOD?
SHAMSUDDIN: Thar Coal project at Block II has already start paying dividends to the host communities. The project has employed more than 1,037 people (63 percent of all the company employees) in all cadres of employment from unskilled and skilled workers to administrative and engineering related jobs. In addition to the direct employment, locals are also benefiting from the ancillary business opportunities that arise from the development of the project.
SECMC and EPTL are also committed to raising the standard of living of the local populace. They have collaborated to form the Thar Foundation, which will invest in the fields of health, education, infrastructure development, livelihood, social and cultural preservation and disaster management. Thar Foundation has already begun to deliver on its mission. It has collaborated with the Citizen’s Foundation with a plan of setting up eight 3P/2S schools in the Tharparkar. The first of these schools in Islamkot will be completed this year and classes are scheduled to begin in August this year.
On the health front, it is running a mother and child care clinic in Thar Coal Block II since last one year in collaboration with Indus Hospital. Plans for a 100-bed tertiary care hospital have also been finalized and the target completion of the project is second half of 2018.
To provide clean drinking water in Thar, 3 RO Plants have been set up in our operational area. We are also planning to install more 50 RO plants for provision of safe drinking water to the local communities.
PAGE: WHAT MEASURES ARE BEING TAKEN TO PROTECT ENVIRONMENT AS THE USE OF COAL FOR POWER GENERATION IS BOUND TO ADD POLLUTION IN THE AREA?
SHAMSUDDIN: Keeping with the international standards, SECMC conducted a detailed Environmental Impact Assessment in Thar. The studies were conducted for both the mine and the power plant in Thar Block-II by international consultants SRK UK and HaglerBailly, Pakistan. The studies indicate no irreversible environmental impact of these projects.
SEPA has also issued an NOC for Mining & Power Projects after Public Hearings and Expert Review Meetings.
Under Pakistan’s legal requirements, Thar projects are complying with the following regulations and in addition, Thar projects are voluntarily complying with the following set standards.
PAGE: WHAT IS THE ESTIMATED COST OF THE PROJECT AND WHAT WOULD BE THE FINANCIAL SHARE OF ENGRO CORPORATION?
SHAMSUDDIN: The combined cost of the mining and power projects is US$2 billion. Engro is the majority investor in the power project, holding 50.1% of its equity while is the largest private sector investor in the mining project controlling 11.9% of its common equity.
With an aim to exploring the untapped potential of Pakistan’s mammoth coal reserves, Sindh Engro Coal Mining Company (SECMC) is a joint venture between the Government of Sindh and Engro Powergen Limited (EPL). The SECMC was established in the year 2009 with the primary objective of making effective use of the ample coal reserves in the Thar desert to meet Pakistan’s power generation need.