KARACHI, July 26: The issue of productive exploitation of coal reserves of Sindh for setting up of coal-fired electric generation projects in the province seems to have been put again in limbo after the formation of the Thar Coal and Energy Board on Tuesday.

The Sindh Mines and Mineral Development Department instantly questioned the composition of the board and its terms of reference in an official communication on July 24.

“There are objections on the composition of the board and its terms of reference which give sweeping powers to the federal ministry of water and power to decide on issues involved in Thar coal mining, development of clean coal technologies, research and development activities and other allied matters,” disclosed a well-placed source in the government.

He held “negative mindset of federal bureaucrats and powerful oil importers lobby in the country” responsible for inordinate delay in the implementation of coal-fired power projects.

“Oil import in 2007-08 was close to $12 billion and may go up further 2008-09,” he said to explain why federal bureaucrats and ex-bureaucrats now serving on political jobs with the present government were bent upon delaying approval of coal-fired projects in Sindh.

What is surprising for officials and investors in Sindh is conspicuous exclusion of Sindh minister, secretary and director general of mines and mineral department from the board.

In an official communication on July 24, the mines department informed the chief minister that the composition of the board is “against 1995 National Mineral Policy and Sindh Mining Concessions Rules 2002 which are uniform in all the four provinces”. The 10-member board was notified by the Sindh government on July 22.

Headed by Sindh Chief Minister Syed Qaim Ali Shah, the board has Sindh Revenue Minister Murad Ali Shah and Irrigation and Power Minister Jam Saifullah Dharejo as members. The provincial chief secretary is also on the board. The Sindh chief minister has nominated his son Syed Asad Ali Shah as a technical member of the board.

The federal government is represented by the law minister, the deputy chairman of the Planning Commission and secretary, ministry of water and power.

Aslam Sanjrani, a retired bureaucrat who at one time was secretary of mines and mineral development department, is acting as managing director of the board without any notification. He is said to have gone to Washington to attend a two-day roundtable conference of prospective investors on “coal and energy” to be held on next Tuesday and Wednesday. Prime Minister Syed Yousuf Raza Gilani will preside over the conference. The Sindh chief minister and many members on the board from the federal and provincial governments are attending this conference, but none from the Sindh mines and mineral development department has been asked to attend.

Formation of the Thar Coal and Energy Board has apparently been done in haste as the federal government was forced to withdraw its earlier notification of July 8 for setting up of a Thar coal authority and also announced the winding up of Sindh Thar Coal Authority. Since the Sindh Thar Coal Authority was formed under a law passed by the Sindh Assembly, its abolition through an administrative notification by the federal government was questioned.

As legal and constitutional problems were raised, Federal Law Minister Farooq A. Naek and Deputy Chairman of Planning Commission Salman Farooqi rushed to Karachi on Sunday and held a late-night meeting with the Sindh chief minister and his advisers that included cabinet ministers and representatives of mines and mineral development department.

A via media was found in the formation of a coal energy board to give representation to the federal government, but for unexplained reasons it excluded the Sindh mines department.

“The great doers in Islamabad are averse to those who want to safeguard legitimate interests of the province,” a well-placed source said.

“The managing director of the board should not be a handpicked nominee of either federal or provincial government,” the well-placed source in the government said. “Our plan is to invite applications from competent and qualified persons who should be interviewed by a panel of government officials and private sector people,” he said.

The Sindh mines and mineral department wants declaration of an upfront indicative tariff structure for coal-fired projects to be set up in Sindh.

“When the government has offered even 13 cents a unit for oil-fired electric generation projects being taken up on fast track, why can’t it give seven to nine cents a unit upfront indicative tariff for a coal-fired electric power project?” This was the question put up to the prime minister and the federal government. Without any upfront tariff, officials in the Sindh government and business circles in Karachi wonder as to what incentives the government would offer to investors in Washington next week?