KARACHI: Strong lobbies in the petroleum sector and supporters of large dams have created hurdles in coal-based electricity generation, Syed Murad Ali Shah, Sindh Finance Minister, said on Tuesday.
He was speaking at a meeting with the members of Karachi Chamber of Commerce and Industry (KCCI) to discuss the provincial budget for 2011/2012.
He said that a powerful lobby in oil import business, which forced the country to purchase this very expensive commodity for electricity generation, always impeded the efforts for use of coal. “The supporters of big dams on arguments that these are vital for Sindh’s water requirements deprived the nation of sufficient availability of electricity.”
Shah said that despite continuous resistance, the provincial government is working on war-footing basis to produce power from coal.
Ayaz Soomro, Sindh minister for tourism, parliamentary affairs and law, who accompanied Shah, said that Sindh was forced not to pursue coal development. “Bureaucracy in the federal government has a major role in non-development of coal resources for electricity generation,” he added.
Soomro said that at least two power plants are operational in Rajhastan with the same quality of coal that is available in Pakistan.
He said Engro has submitted bankable feasibility of Thar coal for power generation. The country would able to have 1,200MW coal-fired electricity by 2016 and 10,000MW by 2020, he said.
The Thar coal fields have the sixth largest deposits of coal, discovered in 1991 by the United States Agency for International Development.
The governments in the later years failed to utilise these reserves, which drove a Chinese company away, which had intended to establish a 1,000MW power plant at Thar.
The minister demanded that the federal government fix the gas prices with international rates.
“Though it would increase the prices, it would increase provincial revenue three to four times,” he added.
The minister said that Sindh produces 76 percent of the country’s gas and provides it at low prices to the whole country.
He assured businessmen that if local prices were linked with those in the international market, the provincial government would subsidise the rates for industrial use.
About the Reformed General Sales Tax (RGST), the finance minister said that there is no disagreement with the federal government.
“After the 18th Amendment, the provincial government from next fiscal year will collect sales tax on services,” he added.
Shah informed the KCCI members that last year the provincial government allocated Rs115 billion for annual development plan.
“For rehabilitation of flood victims, the ADP was reduced to Rs77 billion.”
To a question regarding statistics shared by the federal government on revenue collection, the minister said that the federal government shared the data fortnightly.
He expressed reservations on the statistics and said that the federal government should make these statistics public through official websites.
Shah disclosed that a proposal for levying provincial duty on Afghan Transit Trade was under consideration.
He disclosed that a nominal petroleum cess was also under consideration, which would increase the petroleum products rate, but would contribute to provincial revenue significantly.
The minister admitted weaknesses in agriculture tax collection and called for a tripartite conference in which all the stakeholders give suggestion to improve its collection.
Earlier, leader of Businessmen Group Siraj Kassem Teli stressed the need for computerisation in Sindh Board of Revenue for resolving issues pertaining to lands.
He also hinted at increase in minimum wages and said that existing minimum wages are insufficient.
KCCI president Saeed Shafiq suggested the provincial government make law and order its top priority because without peace in the city the economy cannot grow.
Talat Mehmood, senior vice president of KCCI, suggested that the government should provide an investment-friendly environment so that the economy improves.
He said that security concerns had driven foreign investors away. “Now the local investors as well are reluctant because of the law and order situation.” —Shahnawaz Akhter