KARACHI, March 19: The coal-fired Thar Power Plant may not take off on time if the federal government fails to release funds committed for development work in the area, according to reliable sources.

The project's task force, headed by President Pervez Musharraf, had in May last year sanctioned Rs1,000 million for developing infrastructure in the area before the plant's ground-breaking ceremony.

The meeting had decided that the ground-breaking ceremony would be preformed by the president. But during the nine months of the current financial year, informed sources said, the central government had not released any fund for the project.

However, in anticipation of reimbursement from the Centre, the Sindh government had committed Rs700 million for laying the infrastructure. Development work being carried out includes the laying of 240 km road network and a potable water supply pipeline from Mithi to Islamkote and the site of the plant.

The Sindh Government had signed an agreement with Chinese firm Shenhua to set up the coal-fired power plant which will generate from 300 mw to 600 mw electricity from coal to be excavated from the leased-out 50 square km area.

Under the agreement, after expiry of the lease period of between 25 and 30 years, the assets of the plant would be transferred to the Sindh government. The original plan stipulates the commissioning of the plant by 2007. According to a report, the coal reserves in Thar are spread over 9000 km and will be enough to generate power for 200 to 300 years.

With the commissioning of the plant, the revenue of the province will increase by Rs60 million to 70 million a year as royalty. Later, the plant's power generation capacity could be increased from 600 mw up to 3000 mw.

The provincial government had proposed eight schemes - seven concerning road network and one about potable water - to the federal government but funds for the schemes are yet to be provided by the Centre.