KARACHI, Jan 10: The issue of an upfront tariff for coal-fired electric power generation plants to be based on coal excavated from Thar, Badin and Lakhra mines in Sindh is on the agenda of Friday meeting of the Committee of several secretaries and senior bureaucrats.“I have been given a mandate by Sindh government to get approval from federal government for an upfront tariff of the coal-fired plants,” Mr Abdul Hamid Akhund, the Sindh Secretary for Mines and Mineral Development said.

Mr Akhund is attending the meeting in Islamabad on Friday which will be chaired by Federal Water and Power Minister Tariq Hameed.

The issue of setting up of electric power projects based on a reliable and entirely local source of energy — coal — comes up at a time when six to eight hours power breakdown in all parts of the country has become daily routine. Power breakdown periods are bound to increase to 10 to 12 hours in the summer and small and big fuel based power plants are said to have enhanced petrol import bill.

The Sindh government’s argument is to create right environment for productive exploitation of Sindh coal that will ensure round the year electric power supply since it will be based entirely on domestic source of energy. It will accelerate pace of development in backward parts of Sindh — Thar, Badin, Sonda — and also contribute in progress of the whole country.

Akhund has been pushing Sindh’s case for an upfront tariff for coal-fired plants on several forums on the plea that no investor responded to Pakistan’s power policy since the year 2002 which proposed competitive bidding.

Eventually, when the government removed the condition of open bidding for conventional fuel based electric power projects and waived many other restrictions, the Sindh government wants similar treatment for investors who seek government permission to set up electric power generation plants based on Sindh coal.

On agenda of Friday meeting is the set of agreed proposals of the committee. The committee has already agreed to determine separate indicative upfront tariffs for Thar, Lakhra, Badin and Sonda. It also proposed of keeping the landed cost of imported Indonesian coal minus freight charges as the benchmark price for arriving at indicative upfront tariff.

The cost to be incurred for arrangement of water for the use on the power plant to be built in the indicative cost of the coal-fired power project.

All these recommendations were put before the Economic Coordination Committee (ECC) of the cabinet on December 12 which was chaired by caretaker Prime Minister Mohammedmian Soomro. The ECC decided to refer the matter to National Electric and Power Regulatory Authority (Nepra) with instruction to give its recommendations in 15 days.

But to the shock of many, an adviser in Prime Minister’s Secretariat Mr Mukhtar Ahmad on December 13 in a communication torpedoed the proposal and suggested a competitive bidding. There was an immediate outburst from the Sindh government, the Federation of Pakistan Chambers of Commerce and Industry that has co-sponsored an international conference on Sindh Coal.

The Sindh government demanded immediate re-convening of the ECC meeting to consider the issue. The caretaker chief minister wrote a letter to the federal government while taking notice of irrational proposal of the adviser in the Prime Minister secretariat.

But the shock came last week when Nepra shot down the upfront tariff proposal again. The proposal is therefore being taken up on Friday with a new zeal and zest. Now it is being openly said that an oil lobby with patronage of senior bureaucrats is working over time to keep 175 billion tons of coal permanently buried under the soil and rely entirely on imported fuel.

“It is more than Rs100 billion commission a year business,” remarked an engineer in Sindh government.