KARACHI: China to set up power plant in Thar: MoU signed
By Habib Khan Ghori
KARACHI, March 13: The Sindh government has signed an agreement with a Chinese firm to set up a coal-fired power plant in the Thar area.
The plant will generate 300-600 mw electricity from the coal to be excavated from the leased out 50 square kilometres area.
Under the agreement, after the expiry of the lease period, which will be 25 to 30 years, the assets of the power plant would be transferred to the Sindh government.
In this connection, a Chinese team of hydrological experts, will be visiting the country shortly to explore water resources in the area and prepare a feasibility report.
The project, which will be a commercial venture, is likely to be commissioned within four years after its final approval.
This was stated by Sindh Chief Secretary K B Rind, who led a delegation to China last month and signed an initial agreement on behalf of the Sindh government. The Shenhua Group Corporation was represented by its president and CEO Chen Biting.
Talking to Dawn, the cheif secretary said initially the projected period of completion of the project was four years which includes the period of preparation of its feasibility and installation of power generation unit.
Mr Rind said the plant would generate 300-600 mw electricity and the coal potentials in the Thar area spread over 9000 km would be enough to generate power for 200 and to 300 years.
The power project would add to the provincial exchequer an amount of Rs 60-70 million a year as royalty, and its capacity generation could be increased up to 3000 mw.
To another question, he said the first coal-fired power project was already in operation at Lakhra but it was generating only between 50 and 80 mw.
The chief secretary said that President Musharraf’s personal interest has revived this project who himself would be monitoring its progress and as such its completion could be earlier than the project period.
Giving details of the agreement, he said a Pakistani delegation was earlier taken to Zhunge’er Coal-Fired Power Plant, Zhunge’er Open-Pit Coal Mine, and Yujialiang Underground Coal Mine to have an idea of the performance of the coal projects in operation.
Working out the project details, the SGC demanded that prior to the earth-breaking of the project, a railway line and a road be built in the project area. On this, Pakistani team pointed out that as the rail connection was expensive and time-consuming, a road connection would be enough to meet the requirements because the coal to be produced is only for consumption by the power-plant and thus there would be no need for its mass transportation.
However, the delegation assured the SGC that roads will be upgraded before the start of project to enable it to meet the requirement for transporting equipment up to 400 tons.
The delegation pledged to construct a one single circuit 500 kv transmission line from power plant to Jamshoro Grid that would match the commissioning of the power plant and a second 500 kv circuit to cover the contingency which will be functional two months before the trial operation of the power plant.
The delegation also proposed to the SGC to consider construction of a 500 kv transmission line as a part of the project, and decided to pursue the matter with the SGC team on its arrival.
With regard to the operational years of BOO (or BOOT), it was indicated that the operation time for the power plant will be 25- 30 years according to the usual practice and when the time expires, the asset of the power plant will be transferred to Pakistan.
The delegation assured the SGC about adequate potable water supply, throughout the entire period of project construction free of charge but after completion of the project, water for human consumption shall be charged at a rate compatible with that in the nearest commercial city. However, if the SGC built its own water facilities, no charges for water shall be charged.
On the SGC request, the delegation confirmed to lease out 50 square km surveyed land for a period of 30 years.
The delegation confirmed that the land will be leased out to the SGC for 30 years on nominal charges. However, the SGC would have to pay for the private land while the Sindh government would facilitate the acquisition of land.
On the request of the group, the delegation agreed that the land charges would be collected in phases in accordance with physical occupancy of the land.
The SGC holds that the land, which is not within the 50 square km but may be occupied by Shenhua for water supply, ash stocking and other purposes shall be charged at the fixed rates.
The SGC asked the delegation to provide a list of all the taxes, tax rate and the incentives for the Thar project.
Although the new power generation policy envisages reduction of duty on the aforesaid machinery to five per cent, the new policy has not been given effect as yet, as no notification has been issued. It was agreed that the CBR would be approached to consider rate of duty as per new power policy.
If Pakistan provided the hydrological data at the earliest, its feasibility study would be ready within four months.
The SGC holds that all costs incurred in the purchase of private land, the relocation of private property and the resettlement of villagers within the area of 50 square meters, shall be on the entire cost of Pakistan.
