KARACHI: The construction of two 330MW power plants worth $800 million at Thar will start in the third quarter of this year, said the CEO of Sindh Engro Coal Mining Company (SECMC).

In a media briefing on Wednesday, Shamsuddin A Shaikh said the SECMC — a joint venture between Sindh government and Engro Powergen Ltd — has acquired 6,000 acres for which no resettlement is required.

Bids have been received from leading Chinese firms and a final announcement is expected by the end of this month.

According to the SECMC, the Thar coalfield has lignite reserves of around 175 billion tonnes, equivalent to the total oil reserves of Saudi Arabia and Iran combined, and can produce 100,000MW for 200 years.

The SECMC, working on the project for the past four to five years, is managing the technical and commercial aspects of the project, whereas the Sindh government is developing necessary infrastructure for the project.

On April 30, the SECMC started work to remove 113 million cubic metres overburden in Thar Block-II.

Shaikh described Thar as the most viable power generation option for the country. At the optimum capacity of 4,000MW, power produced from Thar coal can yield a tariff of around 6 cents per Kwh, the cheapest available option. “It was around 50pc cheaper than RFO based power generation.”

“Development of indigenous Thar coal reserves ... will not only address the severe power shortage crisis in the medium to long term but also bring energy security to the country,” he said.

The project in Block-II of Tharparkar District is spread over an area of 79.6 square kilometres. A feasibility study found the project commercially viable with no significant environmental threats and social implications.

In the first phase, a coal mining and power project will be developed with a capacity of 3.8 million tonnes a year and 660 MW. The mine will then be expanded to a coal capacity of 6.5 million tonnes a year to support a 1300MW power plant.

In the second phase, the mining project will be expanded to 13.5 million tonnes and 19.5 million tonnes, with a power generation capacity of 2400MW and 3600MW.

The groundbreaking of the project, expected to be completed in 2017, was jointly performed by Prime Minister Nawaz Sharif and former president Asif Ali Zardari in February this year.