ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday cancelled the generation licence for a $600 million coal power plant being built by a Chinese company in Jhelum district.

The generation licence was issued by Nepra to China Machinery Engineering Corporation (CMEC), and the generation tariff was set at Rs8.55 after agreement with CMEC.

The coal powered plant was to have a generating capacity of 330MW.

However, CMEC stated that the tariff Nepra proposed is not agreeable to banks, the coal present in the region is sub-standard and railway infrastructure is not present in the area.

According to Nepra officials, the plan for the coal powered plant has not been shelved after the cancellation of the licence.

The company which is also a key contractor in the $4 billion 969MW Neelum-Jhelum Hydropower Project in Azad Jammu and Kashmir had been lobbying for Rs11.67 to 12.4 per unit tariff that was far higher than upfront tariffs for projects on Thar coal and imported coal. Nepra allowed a 30-year levelised tariff of Rs8.55 per unit.

The project envisaged power generation along with coalmining project in the area of Choa Saden Shah with an average production of about 6,000 tons of local coal per day.

The CMEC had promised to introduce semi-mechanised mining technique for the first time in the region with an investment of $200 million.