KARACHI, May 14: The Thar coal project, which includes coal- fired power plants to produce 600mw electricity, will cost $500 million, and will be commissioned within four years after its finalization by the government, it is reliably learnt.

The objective of the project is to develop indigenous resources for generation of cheap energy and achieve economic and social uplift of the people of Thar.

In this connection a detailed study has been prepared for presentation to President Gen Pervez Musharraf whose personal initiative resulted in signing of an agreement between the Pakistan government and Chinese firm Shenhua for development of Thar coal and an memorandum of understanding (MoU) for setting up of two 300 mw coal fired power plants.

A team of over 16 Chinese engineers had already carried out a detailed coal geological investigation of the specific area of Thar coal field last year on the basis of the survey. Feasibility report of the project is under preparations.

Under the agreement the lease period would be 25 to 30 years and after its expiry the assets of power plant would be transferred to the Sindh government.

This project, which will be a commercial venture, would initially generate 300mw electricity to be raised to 600mw after adding another plant of the same generating capacity.

The coal potentials in the Thar area were spread over 9000 km which will be enough to generate power for 200 and to 300 years. This was stated by Sindh Chief Secretary who had signed initial agreement with Chinese firm Shenhua Group Corporation during his last visit to China.

On one hand, the power project could add Rs60 million to Rs70 million a year as royalty to the provincial exchequer, on the other its capacity of power generation could be increased from 600mw upto 3000mw, informed sources said and added that the first coal- fired power project was already in operation at Lakhra but its power generation capacity ranges between 50 to 80mw.

According to details of the agreement, prior to earthbreaking of the project a road would be built in the Thar project area. The roads would be upgraded before the start of the project as to be able to transport equipment up to 400 tons.

One single circuit 500 kv transmission line from Power Plant to Jamshoro Grid will be built to match the commissioning of the Power Plant and second 500 kv circuit to cover the contingency which will be functional two months before the trial operation of the power plant.

With regard to the operational years 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 once and for all.

The government would ensure adequate potable water supply, throughout the entire period of project 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.