September 06, 2006	Wednesday	Sha'aban 12, 1427

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ISLAMABAD, Sept 5: The $1.5 billion Thar Coal Power Project with an estimated production capacity of 1,000mw of electricity has been put on hold after the sponsors demanded Rs23 billion to lay a pipeline for fresh water.

“It was not reasonable for the government to provide Rs23 billion for the pipeline”, a senior government official told Dawn. The US-based AES-Corporation had asked the government to provide the money to lay a pipeline from Nara Canal to Thar, he said.

On the other hand, he said, some Chinese and German studies suggested availability of water at the coal bed.

A new study, he said, would be conducted to see if a power project would be feasible in Umarkot through transportation of coal from Thar by laying a rail track and running a regular train. The new site could also be used for power generation by using imported coal, he added.

The government had last year offered block No2 at Thar to AES-Corporation as an integrated project, comprising coal mining and power generation.

Thar coal is considered as the largest deposit in the world. Its four blocks were identified by the Geological Survey of Pakistan in the early 1990s while another two blocks have now been created by the Sindh government.

The official said that a full-fledged $500 million Thar Coal Mining Company is being set up for another Thar block to develop a mine for power generation. About 20 per cent shareholding would be given to the Sindh government and 80 per cent shares would be offered by the federal government to the private sector, he added.

Block one of Thar coal was earlier offered to Shenhua group of China. The project hit snags when the ministry of water and power and Wapda refused to offer over 5.39 cents per unit tariff to the company though the federal petroleum ministry and the Sindh government had agreed to offer 5.7 cents per unit tariff.

The GSP drilling data has indicated three aquifers at an average depth of 50, 120 and over 200 meters. The sponsors, however, have opined that the underground water is not sufficient to meet the project requirements.

The officials said the government had now realized that the coal deposit were enough to meet the country’s energy requirements for centuries and it was time to focus on developing these resources, instead of continuous dependence on imported fuels.