KARACHI
The electricity crisis will not end in the country unless the government will not spend money on transmission lines, power theft and cheap power production including coal and hydel, said Sindh Engro Coal Mining Company CEO Shamsuddin Ahmed Shaikh.
In Pakistan, we are producing 67 per cent energy from thermal, or in other words, through expensive furnace oil and therefore we are unable to provide cheap electricity to our production units and this makes us uncompetitive in the world’s markets. Through hydel we are generating 34 per cent electricity while 5 per cent from nuclear and 1 per cent from other ways, he added.
“The first Thar Coal-Fired power projects of 660 MW will start its operation by 2019, as the first phase would begin commercial operations about four months ahead of its deadline,” the CEO said in an exclusive interview with Pakistan Today.
He said, “The commercial production of the project would begin by June 2019 instead of October 2019.” “The project has saved $ 100 million as an earlier estimated cost was $ 850 million,” he claimed.
He further revealed that after completion of these Engro projects, more local investors like Lucy Group, Arif Habib and House of Habib are ready to invest in coal power plants in future, in which Lucky Electric Power Ltd has been shortlisted for coal off-take in phase-II of mine expansion and by phase-III, it will set up a 660 MW power plant at Port Qasim.
Sindh Engro Coal Mining Company (SECMC) has engaged Plant Co. and RWE for the development RFP and evaluation of equipment proposals for the expansion. He said Plant Co. has a vast experience of consultancy for large scale equipment consultancy in Australia.
He further elaborated on a little historical context:
In May 2008, the government of Sindh invited proposals for the development of Thar Coal reserves through a public private partnership basis. The SECMC was formed as a joint venture between the government of Sindh (GoS) and Engro Corporation in October 2009 in order to develop of mining at Thar Coal Block-II of the Thar coalfield.
In May 2013, a power company in the name of Thar Power Company Ltd. (THARCO) was incorporated as a subsidiary of SECMC with the mandate to develop the first power project based on coal mined by SECMC. As per the JV agreement, Engro is responsible for Project Management and Financing, while GoS for Infrastructural Development and attaining requisite consents and approvals for the project.
“Sindh government is very cooperative in this project as without its coordination the work in all field was not possible and really the government wants development in power sector of the province,” Shaikh claimed.
He said the financial close of the project was achieved on April 4, 2016, and since then 14.2 per cent of the total work has been completed.
He said work on the power plant and coal mining was going on simultaneously. This is the first coal-fired power project in Thar and it is one of the leading energy projects of China-Pakistan Economic Corridor.
He added that this was also the only energy project with a majority private sector sponsorship. He informed that under the second phase, two more power plants (330MW each) would be completed by December 2019, as the SECMC has committed to off-take coal for phase-II (7.6 million ton per acre) to Thal Limited and Hubco for setting up plants at block-II.
The SECMC also planned to add an additional capacity of 11.4 million tonnes per acre coal beyond phase-II by December 2021.
The main sponsors of the project were Sindh government with 54.7 per cent share, Engro and Thal Limited with 12 per cent each, and Habib Bank Limited (HBL) with 10 per cent share.
Shaikh said that the total cost of two 330MW mine-mouth power plants would be $ 1.1 billion with 75:25 debt to equity ratio, and it would consist of 75 per cent foreign and 25 per cent local debt. The main sponsors of the project, he added were Engro with 50.1 per cent share, while its other shareholders included Liberty, HBL, and China Machinery Engineering Company (CMEC).
He said the Sindh government had been a key enabler for the Thar project, which committed 110 million equity investments for phase I and provided a backup sovereign guarantee to the federal government of $ 700 million.
He further claimed, “Thar Foundation has been established by companies engaged in Thar coal projects together with the government of Sindh for the betterment of the principal stakeholders of Thar Coal i.e the people of Tharparkar through graduated and sustainable interventions in the field of education, healthcare, livelihood, infrastructure, social preservation and disaster management.”
He further told that Indus Hospital has signed up MoU to set up a 100-bed hospital in Islamkot by the end of 2018 which will fulfil medical requirement for the people of Thar. Meanwhile, SECMC has signed a MoU with TCF to establish eight schools in each Taluka of Tharparkar plus Block-II and resettlement village. Each school can cater to 1000 students.
He further informed – to engage local Tharis into competency based skills who will later be absorbed into projects at hands, pieces of training are offered to give them hands on experiential learning with modern theoretical methods and excellent practical exposure. More to build the capacity of conventional tradesmen of Tharparker and adjoining districts by adding value to their expertise through in-house training on specialised trades by best technical institutes we aim to enrich their skills proficiency and enable them to be part of Thar’s development.
In order to ensure that the benefits of Thar’s progress reach all segments of the society, SECMC and Thar Foundation plans to start specific programs for women by giving them vocational training of Dumper drivers. Initially, we have selected 35 women drivers and in the hiring process.
