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| February 5, 2002 | Tuesday | Ziqa’ad 21, 1422 |
Chinese firms to set up two power projects
ISLAMABAD, Feb 4: Two Chinese companies would set up $500 million worth of two coal-based power projects in Jherruck, near Thatta, Sindh, official sources told Dawn.
The Sindh government has issued a letter of intent (LOI) to Jiangsu to carry out feasibility study of building a 250-mw coal power project in Jherruck.
Separately, a memorandum of understanding (MOU) has also been signed with China Machinery Import and Export Corporation (CMEC) to set up another power project of similar capacity. The cost of each project is estimated at $250 million, sources said.
Jherruck, near the historical city of Thatta, is reported to have enough coal reserves to produce 500mw electricity for more than 20 years and is second largest coal-bearing area after Thar coal system.
The sources said that the provincial government and the two Chinese companies were currently negotiating terms of reference of the feasibility studies. The companies would be required to sign power-purchase agreement with Wapda on successful completion of feasibility studies, these sources said
The CMEC had earlier given the contract of mine designing of Lakhra Coal Mines Corporation (LCDC) but failed to complete the job, these sources said.
The petroleum ministry sources said that these agreements would encourage more companies to start looking at investment opportunities in the coal and power sector, particularly the Thar coal reserves.
The sources said that discussions with Shenhua Group Corporation of China for a portion of Thar coal project were already in progress, and the government wanted to lure more companies for the same project because it was a huge project and could not be handled by one investor. Also, involvement of more companies would create a competitive environment and better results, these sources added.
The Shenhua group has already informed the government that Thar coalfield possessed significant potential and related environment was very suitable for development, but required a lot of preparatory work for optimum utilization of coal.
Around 175 billion tons of coal is spread over 9,000 square kilometres of Thar desert and the main coal bed thickness ranged between 12 and 21 metres at an average depth of 170 meters.
The government, official sources said wanted to maximize the use of coal in power generation, primarily for import substitution and cheap energy production. Cement plants across the country are currently in the process of conversion from gas and fuel oil to coal under a policy decision of the federal government.
Simultaneously, the government is asking coal miners to keep prices at a reasonable level and encourage