February 03, 2008	Sunday	Muharram 24, 1429

KARACHI, Feb 2: A committee of several top bureaucrats and caretaker ministers, constituted by Caretaker Prime Minister Mohammedmian Soomro on Wednesday, with minister for petroleum and natural resources as its head, has proposed the controversial international competitive bidding for tariff of coal-integrated power generation projects of 1,000 and 2,000 megawatts.

Knowledgeable sources in the Sindh government stated that the committee comprising secretary of water and power, managing director of Private Power Investment Board, Wapda, secretary of petroleum and natural resources, deputy chairman of Planning Commission, secretary of mines and mineral development of Sindh met on Thursday to take decisions on the issues related to coal-based power projects.

“A decision was made to float international competitive bidding for integrated coal-mining and power projects of 1,000 to 2,000 MW,’’ a well-placed and knowledgeable source disclosed. “Perhaps, the committee anticipates the expected response from investors, which is bound to be negative.”

It was also decided to adopt unorthodox approach for working up a fast track system for processing and finalisation of such proposals,’’ said another source.

“We issued MoUs to five investors, a majority of whom have lined up foreign investors,’’ disclosed a retired government employee. But after witnessing a harsh treatment given to Chinese investor in 2004 on the issue of tariff, the prospective investors now want an upfront tariff.

The Chinese investor wanted 5.7 cents tariff while the government did not agree to offer more than 5.3 cents per unit. The government is now proposing 7.8 cents on a unit.The committee, however, reiterated Sindh’s prerogative of allocating mining sites and composition of royalty on coal in accordance with the Constitution.

Instructions are being issued to Wapda to expedite the laying down of a transmission line to receive power, to be generated from Thar-based coal-fired electric generation projects.

Wapda is also being given the task to construct a conduit and canal that should be sufficient for 20,000 MW projects.

The Sindh government would prepare a blueprint of the project while funds would be provided by the federal government.

The federal government would be asked to provide extra water from irrigation system for this conduit.

A major problem in Thar is presence of sub-soil water for which the Sindh government is expected to prepare a project for extraction and disposal of this water.

The committee also decided to ask the government-managed Thar Coal Mining Company (TCMC) to expedite coal-mining in Thar while Wapda would utilise this coal for power generation.

Officials believe that a government-managed coal-based power project would encourage local and foreign investors to come in a big way. But sources apprehend that exploitation of Sindh resources by the federal government agencies would not remain confined to Wapda, but many other government agencies are in the run to join the race and make a quick buck.