The government is to seek foreign funding for development of infrastructure to support early completion of Thar coal project. Official sources told Business Recorder that the Sindh Engro Coal Mining Company has completed the detailed feasibility study of the coal mining project, estimated to produce 6.5 million tonnes per annum of coal from block II of Thar coal fields.
Sources said that the feasibility study proves that the project is technically viable. However, to ensure its economic viability the infrastructure related to Thar coal development is of critical importance, which has to match the timelines of the project. During recent presentations before the president and the prime minister, the infrastructure development initiatives were discussed in detail and both leaders had urged all relevant ministries to expedite project approvals on fast track basis.
In terms of Rule 6 and 11 of the Rules of procedure of the Council of Common Interests prompt action has to be taken by concerned federal and provincial governments to give effect to the decision of the CCI. According to sources, no investor can achieve financial close for the project of this level without provision of robust infrastructure. Provision of infrastructure is the responsibility of the government. Hence, it requires appropriate commitment on the part of the government to attract and retain investment for this kind of project.
Thar Coal & Energy Board is actively pursuing the task and is focused on developing an enabling environment which includes developing physical infrastructure that can facilitate the mining and power generation. In order to develop physical infrastructure for development of Thar coal, initial feasibilities/estimates suggest ensuring local/foreign funding of approximately PKR 148.09 billion. This includes funding of PKR 29.75 billion for water supply, PKR 12.75 billion for effluent disposal, PKR 17 billion for constructing railway network and PKR 4.24 billion for improvement of road network.
To evacuate 10,000MW from Thar coal based on production projections, laying and installing transmission network is necessary from Thar that would require an allocation of at least PKR 85 billion.
Sindh government has urged for preparation of a comprehensive strategy and roadmap by Economic Affairs Division to explore international financing options. In this regard, it has been proposed that a core group may be constituted by EAD to expedite and follow up with international agencies, international banks through Pakistani Economic Ministers abroad, and other available financing options including but not limited to Pak-China "Five Year Development Program on Trade and Economic Cooperation".
(Sourced from Business Recorder)
