Rs3.2 bn Thar coal gasification project: Govt links more funds to third party validation

Dr Samar Mubarakmand says he is open to due diligence by third party

ISLAMABAD: The government has decided to allocate more funds for the Thar coal gasification project in case Dr Samar Mubarakmand goes for due diligence of the project by third party.

“We have told Dr Mubarakmand in plain words to let the project validated by third party as to whether it is commercially viable or not and in case the third party finds the project is viable, then the government will not only hesitate to allocate more funds, but also play pivotal role in raising funds from the private sector,” Deputy Chairman Planning Commission Ashan Iqbal said.

However, sources in the Planning Commission said unless the Rs3.2 billion project is validated, there will be no more funding meaning that it has been linked with validation of project by a third party.

In case, Dr Mubarakmand continues to avoid the due diligence of the project by a third party, the government will be left with no option but to go for the scrutiny of the project and carry out the financial audit.

The new controversy rose to prominence when Dr Samar Mubarakmand himself appeared on a private channel and charged that the government was no more inclined to provide funds for the project despite the fact that he had already demonstrated to produce 10MW electricity through gasification of Thar coal, but the government does not want cheaper electricity being produced through gasification that’s more importantly environment-friendly.   

 Mubarakmand in the same program also disclosed that some influential people in the government had their tentacles with huge shares in some of the IPPs and they did not want the gasification project to continue. He did not stop here, rather he declared the Thar Coal Power project a big scam.

Way back the Planning Commission conducted appraisal of Thar coal gasification in June, 2012 and decided that the pilot project should be operationalized for power generation of 8-10MW electricity within a period of 10-12 months.

This project would be scaled up for 2x50MW Power Plant based on IGCC technology. Pilot Burn was ignited in December, 2012. The Planning Commission had approved the project with cost of Rs9 billion and engaged Dr. Samar Mubarakmand to develop a local technology and execute the pilot project at Block V.

Shaukat Hameed Khan, who earlier served as Chief Science Officer in the PAEC, member Planning Commission, rector of GIKI and is now serving as chairman COMSTECH, said Thar gasification project is not commercially viable saying the then member monitoring Gen Shahid Niaz had carried out the audit of the project in 2013. 

Gen Niaz himself along with experts went to the site of project where no electricity was being generated.  In the audit report, it was recommended that in the 6 months, gas needs to be first produced and then bound the project to make 5MW electricity. 

In the report it was also mentioned that during the inspection, the project was found closed and no gas was being emitted. Since then funds are not being released.  Mr Khan said that no electricity was being produced commercially in the world through underground gasification of coal. However, on trial bases, the gas is being produced.

The government approved the underground coal gasification project at an estimated cost of Rs9 billion after initial experiments proved to be a success. Eminent energy expert Arshad H Abbasi currently associated with SDPI says the gas generated by Thar coal had heat quality of 156 BTU whereas natural gas possesses 900 BTU heat rate and bio gas 600 BTU. 

Joint Secretary Power in Ministry of Water and Power Mr Zargham Ishaq Khan, when contacted, over terming Thar Coal Power project being built by Engo-Sindh government by Dr Samar said that the comments were rubbish and how burning coal underground was not a scam if extracting the coal in Thar was a scam.

When contacted Dr Samar came up with the response saying: He is open to validation of the project by a third party.  He said when the government decides to bury the project it asks for seeking the business plan and stresses third party validation. 

He said the government managed to get Orange Line project recommended by CDWP to Ecnec within a week and in the next month Ecnec approved the project without business plan and validation by third party setting aside the impact on environment. 

“Since it was a political motivated project which is why it was approved in haste.” When it comes to Thar gasification project, the government has factually buried it as in the current regime political interests are more important than the economic interest of projects like Thar gasification project.

He also mentioned unfolding that our project is not connected with national grid and NTDC is not inclined to purchase the electricity. However, he said the project of 10 MW was enough to provide electricity to Mitthi, Islamkot and other city.

Dr Mubarakmand, however, said that he himself suggested through a letter to Planning Commission three experts’ names, including one from China who is known expert of gasification, for carrying out the third party validation, but received no response from the office of deputy chairman.