KARACHI, July 12 The Rs9.6 billion underground coal gasification (UCG) scheme aimed at setting up 1,000MW power plant at Thar Block-V is in jeopardy because of paucity of funds.

The project planners warned that if the federal government did not provide the committed fund the scheme would not be completed in one-and-a-half years' time.

They said the government had provided only Rs295m in April this year against a committed Rs450m, which hampered work on the project.

The UCG scheme, being supervised by a governing body, is headed by nuclear scientist Dr Samar Mubarakmand.

The governing body in its recent meeting in Islamabad decided to award the drilling contract to the Geological Survey of Pakistan (GSP) after very high value bids were submitted by local companies.

In response to the tender inviting bids for horizontal drilling at the Thar Block-V only three companies, including a Chinese firm, submitted bids. The minimum bid submitted by local company Rockwell was Rs2.5 billion, which was deemed very high, compared to the cost of the project at Rs9.6 billion.

The governing body then decided to sign a contract with the GSP for drilling nine bores to convert the underground coal into gas which would be extracted to run a power plant.

Talking to Dawn from Quetta, the GSP director planning confirmed that a drilling contract for the Thar project had been signed. He said since the agreement was signed in Islamabad he did not have the details. He, however, said that drilling at the site would start as soon as initial payment was received.