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June 20, 2011

Govt ignores allocations for Thar Coal project


June 20, 2011

ISLAMABAD: Though Pakistan is currently faced with an unprecedented energy crisis, the government has decided not to go for a cheaper and long-term initiative to produce electricity by denying funds to the Thar Coal Underground Gasification (TCUG) project.
Sources in the Ministry of Petroleum and Natural Resources told The News the government had allocated a mere Rs2.5 million for the project being taken care of by leading nuclear scientist and member Planning Commission Dr Samar Mubarakmand.
In the new Public Sector Development Programme, the paltry amount earmarked for a project of crucial importance for Pakistan is hardly anything compared to the estimated total cost of Rs126.649 million, which, only up to June 2011, is Rs20 million.
“This will be a serious setback to Dr Samar’s efforts to initially produce 100MW electricity by end 2013,” a source involved in the project told The News here Saturday. He explained that they had planned to float tenders for the import of a power plant and related machinery, expecting the release of adequate funding which they had sought from the government. However they were disappointed by the response from competent authorities.
The source regretted that the committee, formed to prioritise projects’ allocation for the next fiscal year, had ignored the Thar gasification project. The source, requesting anonymity, pointed out they needed US $70-75 million alone for the proposed power plant. “Once you have funds and have floated tenders and then placed orders, it takes about two years for the delivery of the plant,” he said.
Replying to a question about preparations, he said they had already readied an underground gasifier and looked forward to moving ahead but their initiative had been stymied for the time being due to non-availability of funds.
He explained that they also wanted to construct a related structure for the plant, if and when imported, and start work on the next gasifier.
A senior

official at the Ministry of Finance, when approached for comments on the matter, said they had written to Prime Minister Yusuf Raza Gilani for provision of funds in one go so that they could accelerate the pace of work for power generation to rid the country of the energy crisis.
Media reports have quoted Mubarakmand, who was given a one-year extension as member of the Planning Commission late last year, as having said the deposit had the potential to transform Pakistan into a self-sufficient and energy-surplus country in a short span of eight to 10 years. It can produce 50,000MW of electricity for decades and 100 million barrels of oil for 500 years.
According to estimates recently compiled by the National Electric Power Regulatory Authority (Nepra), the average cost of generating electricity from water resources stood at about 50 paisa per unit, Rs4.50 from gas, Rs12 per unit from furnace oil and more than Rs16 per unit from diesel.
Experts have said that from only one percent of the total Thar coal deposit, Pakistan could produce 10,000MW of electricity for 30 years and 100 million barrels of diesel. The electricity to be produced from block-5 would cost a maximum of Rs4 per unit.
Under the project, coal would not be mined but rather plants would be installed on deposits to produce gas in a most sophisticated manner. The Thar coal reservoirs have the potential to generate 5,000MW electricity for at least 800 years to meet the growing energy demands of the country.
“The coal deposits in Thar can change the fate of the country if utilised in a proper way,” said an expert. “It can massively save on the oil import bill, reduce the unemployment ratio and help strengthen the economy and currency.”

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