CHINESE INVESTMENT IN THAR

A team of Chinese experts is already in Pakistan

From SHAMIM AHMAD RIZVI,
Islamabad

Aug 09 - 15, 2004

Prime Minister-in-waiting Mr Shaukat Aziz has vowed to the people in Tharparker to transform their areas and bring them economically at par with other areas of the country.

Shaukat Aziz is seeking election to the National Assembly from Attock in Punjab election from Thar in Sindh and his success is almost certain from both seats. Mr Aziz has, however, indicated that he will retain the seat from Thar to become the Prime Minister and resign from Attock seat which was vacated for him by the niece of Prime Minister Chaudary Shujat Hussain.

It is indeed good news for the people of Tharparker that the next Prime Minister of the country will be their representative. The Prime Minister-in-waiting has assured that he will transform Pakistan into an economically strong Islamic State and improve the socio-economic conditions of the common people by completing the on-going and initiating new development projects in every nook and corner of the country. Less developed and neglected areas like Balochistan, Cholistan and Thar will receive special attention of his government and all such efforts will be made to root out absolute poverty and bring change in the lives of people living in their areas and bring them at par with people living in other parts of the country.

Pakistan's Thar Desert, despite being blessed with rich natural resources, has remained the most neglected one in the country and people living there have been neglected to abject poverty. It is only recently that the authorities started giving attention to the enormous natural reserves. In 1991, geological survey of Pakistan spotted large reserves of coal with the help of United States Agency for International Development (USAID).

The development of Thar coal reserves has been included in the priority list of projects which are likely to be launched by the present government. The government has already set up a task force on Thar coal reserves which is headed by the president Gen. Pervez Musharraf himself.

The Pakistani delegation headed by Finance Minister Shaukat Aziz recently visited China to finalise various business-cum-assistance deals with Chinese authorities also discussed the Thar coal project. The Minister held detailed discussions with Mr. Ye Quing Chairman of a leading Chinese company specialising in coal mining development, who showed keen interest in the project and found it commercially viable. A team of Chinese experts is already in Pakistan to make on the spot studies.

The high powered task force is headed by President Pervez Musharraf and its members included Federal Minister for Petroleum, Deputy Chairman Planning Commission, Sindh Development, Chairman Board of Investment, Chairman WAPDA, Chairman Sindh Privatisation Commission, Federal Secretary Petroleum, Provincial Secretary Industries and Mineral Development and DG Sindh Coal Authority. The Task Force may also associate private sector members as and when considered necessary. Its terms of reference are to carry out studies including geological exploration, investigation and project specific feasibility studies, to prepare policy and projects on the coal-fired power generation, to be responsible for distribution and transmission of electric power, infrastructure development to develop skill development in connection with surface coal mining and coal-fired power generation related technologies to provide incentives to promote investment in coal mining for various applications including power generation.

Pakistan's Thar Desert contains the largest coal reserves discovered to date, covering an area of 10,000 square kilometres. The Thar Coal Field, should it be developed, will yield over 200 billion ton of coal used to produce electricity, it will yield sufficient power to make Pakistan self-sufficient in electrical power. Pakistan has reserves of natural gas, but these will start to diminish by 2010.

Since the discovery of Thar coal in 1991, very little development work has been initiated. Thar coal has low calorific value but is environmentally friendly with low sulphur content. The Thar coal deposits extend across the border and they are currently being mined for power generation in Rajistan in India. India has no reservation about the use of these coal deposit. Coal extraction from Thar will be a development requiring 3-4 years before coal is made available for use. The ideal situation would be that GoP uses the coal to reduce Pakistan's dependence on thermal projects, the only alternative method is to develop the Thar coal via international financing. This is possible only by inviting international power companies to invest in Pakistan and provide the required funding for the development of Thar coal field.

The willingness of the Chinese National Mechanical Import and Export Corporation to make investment in coal-based power plants in Pakistan is indeed highly welcomed development against the long backdrop of inaction on this front by the previous government despite the presence of high quality coal reserves in Sindh. It may be recalled here that a Hong Kong-based firm specialising in power generation projects had, about five years ago, concluded an agreement with the then government for the establishment of three cola-based power generation units of 200 megawatt each at Keti Bunder near Thatta. But the project failed to materialise because the foreign company backed out of its earlier commitment to obtain coal supplies from the reserves in Thar and instead insisted on import of coal from Hong Kong. It may be pointed out here that the coal reserves in Jirk, which is in the close vicinity of Thatta, were surprisingly not mentioned as a domestic sources of supply for the Keti Bunder project which was conceived on the basis of Thar coal reserves.

Besides power point producing cheap electricity coal can also help the cement industry which is complaining because of heavy cost of inputs. The use of coal would result in a saving of nearly Rs.495 million per year for a plant producing 3,000 tons of cement per day. Among other advantages accruing from the contemplated shift, mention has also been made of the prospect of the national exchequer saving $170 million in the event of cement sector running to its full capacity, or at least $100 million a year on the utilisation of 63 per cent production capacity as now.