Govt criticised for allowing projects on imported coal, Thar ignored

LAHORE: The government’s permission to coal import for power generation invited anger from industry stakeholders, who dub this move as negligence to Thar resources.
Industry sources on Saturday criticised the government for dropping projects, which proposed cheap power production on fast track basis on local coal and including power plants on imported coal, which were relatively at early stage of planning, in the early harvest programme – part of free trade agreement between Pakistan and China.
Ahsan Iqbal, federal Minister for Planning, Development and Reforms, said the notion of not giving importance to indigenous resources is not true.
“Both Thar coal based and imported coal fired projects are included in the priority list,” Iqbal said.
“Local coal also needs mining. Both options are being worked.”
Dr Waqar Masood Khan, federal Secretary Finance said actually one of the projects, a joint venture between government of Sindh and Engro, is included in the priority list of early harvest.
“The Chinese are also keen, but the problem is that the technology needed for using our own coal is not fully developed and would be more costly,” Khan said. “Using imported coal until such time is sensible.”
The sources said the historic dip in crude oil prices in the international market provides an opportunity to the proponents of imported coal-based plants as coal price also witnesses a steep fall.
In the last few weeks, these people convinced policymakers that imported coal has become cheaper and thus should be given preference in the priority for coal-fired power plants under Pak-China Economic Corridor.
It is learnt that during upcoming visit of Chinese President, which is expected in February, 2015, investment plan for these projects will be inked between the two neighbouring countries.
The policy makers reportedly bought idea of some private companies to set up imported coal based plants with Chinese financial assistance. However, the sources said, they forget that drop in coal price in international market is a temporary phenomenon and this market will remain volatile in future.
In sheer contrast, price and availability of Thar coal will be smooth in foreseeable future, sources said and adding cost of Thar coal power is still estimated to be half if compared with the cost of power generated with imported coal fired units.
The Thar coal-based plants provides a solution, which addresses affordability aspects of electricity, which is a burning issue nowadays, the sources said, stressing the need to develop indigenous energy resources on urgent basis.
“Most importantly, there will be no requirement for coal imports if we establish Thar coal power plants,” they said.