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January 24, 2011

Projects we cannot handle

World

January 24, 2011

I am writing this column after serious consideration and hesitation. It is not meant in any way to hurt anyone’s feelings. However, since the matter under discussion is of vital national importance, I consider it a duty to inform the rulers and the public of the finer points of what I am going to discuss. The topics are the ongoing controversy and discussions about the Reko Diq mines and concessions to foreign firms for the extraction of gold and copper, the Thar Coal Project and production of power by nuclear reactors.
The Thar Coal Project was, until recently, a hot topic. We probably all remember that we were promised 50,000 MW of power for 500 years, plus hundreds of thousands of barrels of diesel. There were claims that we had 185 billion tons of coal reserves, while reliable estimates put this figure at only three billion tons, and that too of low grade. That balloon burst quite quickly. I wrote factual details in my column on the subject in Jang and The News on Nov 1, 2010. In that column I also disclosed how our able former foreign secretary, my dear friend Riaz Mohammad Khan, had worked hard to arrange a deal with one of the largest coalmining and -processing companies of the world, Shenhua Group of China. The company was willing to provide electricity at 5.39 cents per unit and had committed to providing four power plants of 325 MW each, by 2010. However, since there was no commission involved, the deal was sabotaged. Riaz Khan is still annoyed and angry at the loss of that opportunity.
Shenhua employs about 170,000 people and produces thousands of megawatts of power. It not only mines about 350 million tons of coal per annum but also converts it into gas and liquid fuel. It has put up plants in Mongolia, Indonesia and Australia. The plant in coal-rich Mongolia is functioning since 2008. It not only has the manpower, money, equipment and extensive experience required, but it would also be very reliable because of our exemplary relations with

China.
Since I have studied metallurgical engineering at some of the best universities of the world and have 40 years’ experience in this field (as well as that of nuclear technology), I am in a position to write extensive, detailed articles on coalmining, coal varieties and coal’s conversion into gas and liquid. I can say with authority that we do not have experienced and qualified engineers to handle such a complicated, giant project, to say nothing of my having had to cope with those who indulge in self-projection though they don’t have fundamental knowledge or qualifications in the required field.
In my earlier column of Nov 1 I had mentioned the statements made by Dr Ansar Parvez, chairman of the Pakistan Atomic Energy Commission (PAEC) in Vienna in which he claimed that 8,080 MW of power could be produced by 2030. In order for that to be produced, either 29 reactors of 300 MW each or ten reactors of 900 MW each would be required. A 300-MW reactor costs about $1 billion and requires eight to ten years for commissioning. A 900-MW reactor would naturally cost proportionately more and would take the same time, if not longer, to commission. I am at a loss to see how Dr Parvez aims to achieve this.
The PAEC has existed for more than 50 years and employs almost 20,000 people, but it has not been able to make a single power reactor, even of a small size. This is despite the fact that the technology itself is half-a-century old, and India and South Korea are among countries which have been producing reactors for years. The one at Karachi was supplied by Canada and the two at Chashma by China.
In 1979 the-then chairman of the PAEC, Munir Ahmad Khan, had made similar claims. At that time it was said that the PAEC would commission one reactor every year from 1980 onwards until the year 2000, thus producing 20 reactors in total!
Whether we are talking about the Thar Coal Project, the Reko Diq Project or any other major project, we need young, experienced, highly committed engineers with the proper educational background. It is an extremely difficult and lengthy process and the team leaders and engineers will have to make it their life’s work to complete the project.
The Pakistani rulers and public alike seem to be under the impression that, since we managed to produce nuclear weapons and missiles, we can now achieve miracles. Those were totally different projects. As far as the nuclear programme is concerned, I had invaluable practical experience and had the required educational qualifications. My team and I were all highly committed to the goal of making the project a success. We believed that Pakistan’s very existence would be at stake if we did not complete the nuclear programme successfully.
Another important factor was the role played by personalities like Mr Zulfikar Ali Bhutto, Gen Ziaul Haq, Mr Ghulam Ishaq Khan, Mr Agha Shahi, Gen Khalid Mahmud Arif, who was vice chief of the army staff at that time, Gen Mirza Aslam Beg and Gen Abdul Wahid Kakar. All were sincere in their commitment. The necessary funds (about $25 million per year) were provided to us, as were all facilities required by the programme.
Such conditions are now non-existent. We now have corrupt, selfish people at the helm of affairs. We have only to look at the glaring examples of PIA and Pakistan Steel.
If important projects like those mentioned above are given to Pakistanis, they will become yet more PIAs and Pakistan Steel Mills. Nepotism, overstaffing with unqualified and inexperienced people, overabundance of persons of official cadre, fleets of land cruisers – you name it, it will be there. We have all heard details about the corruption related to the Agosta Submarine. Not only the fish’s head, but the whole body is rotten.
The present government, or any that may follow, will never be able to provide enough funds to keep such projects going. An initial investment of hundreds of millions of dollars will be required with little to show for it in the beginning. The projects will drag on and the poor people will see gold, copper and electricity only in their dreams. Looters will have a heyday and they will walk off with filled pockets. In a country where officials cannot even build, complete and maintain schools, colleges and hospitals, how can one expect miracles?
So what is the solution for Thar? My sincere and considered advice is to give the Thar Coal Project to Shenhua. Sort out terms and conditions that are mutually beneficial and acceptable. The Chinese are our trusted friends and they will be more than accommodating. Regarding the Reko Diq projects, either discuss acceptable, beneficial terms and conditions with the present companies or find others which can offer attractive terms and conditions. If the earlier terms and conditions set were detrimental to us, it was our fault that we accepted them, in the first place; the foreign firms are not to blame. More often than not, our own people indulge in corruption at the cost of national interests. Haven’t we got the examples of the IPPs and the RPPs?
Our financial wizards who signed the deal for F-16s had, for reasons best known only to them (money?), agreed to pay the company for the storage of the planes. We paid hundreds of millions of dollars as advance payment and the planes were ready, but we still paid millions more. If the deal for Reko Diq is faulty, hold the negotiators and the signatories responsible, not the foreign firm. It was our duty to safeguard and protect our national interests. However, such contracts are for mutual benefit – a question of give-and-take.
I am very much afraid that if we take the bait and try to do the job ourselves, gold, copper, gas and electricity will be but a mirage in the distance, with sand, rocks and bushes remaining the reality. The Pakistan Engineering Council, the Institute of Engineers and the Pakistan Academy of Sciences could all help in the negotiations, if need be. Riaz Mohammad Khan would still be our best bet to help in negotiations with Shenhua. I would assist him with great pleasure, if requested.
Email: [email protected]

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