ISLAMABAD, Nov 7: The government is expected to offer within a month an indicative tariff for coal-based power projects to ensure early setting up of four projects in Sindh of about 1,550-MW.

The National Electric Power Regulatory Authority has, however, expressed reservations over the government plan.

The government has already issued letters of interest (LoIs) to four companies to set up their projects based on coal found in Thar, Sonda-Jherruk and Lakhra fields.

Sources told Dawn on Wednesday that Nepra Chairman Abdul Rahim Khan expressed reservations at a meeting presided over by Water and Power Minister Liaquat Ali Jatoi that the power regulator could not approve the indicative or upfront tariff for coal-based power projects unless the cost of coal production from fields in Sindh, equipment and machinery and other fundamentals were available.

He said that since the projects were still in the feasibility stage, it would not be appropriate to make final assumptions for tariff.

The sources said that Nepra was reluctant to finalise any upfront tariff at such an early stage on the grounds that investors would later assume such price as base rates and demand increases as had happened in the case of thermal power projects.

The water and power minister informed the meeting that he would get the upfront or indicative tariff approved from the prime minister or the Economic Coordination Committee (ECC) of the cabinet because the country faced acute power shortage and needed investment in the sector. He constituted a committee led by secretary water and power to submit within a week recommendations on the upfront tariff. Other members of the committee comprise the chairman of Nepra, managing director of the Private Power and Infrastructure Board (PPIB), director-general minerals of the petroleum ministry, Wapda’s member power and Sindh secretary for mines.

The secretary mines was of the view that the development of power projects in Thar, Jherruk and Lakhra could not progress unless upfront tariff was offered to the investors. He informed the meeting that the provincial government had provided the indicative coal production cost, but it was not acceptable to Nepra.

The power minister, the sources said, asked the Nepra chairman to cooperate in the development of policy framework and tariff structure for coal-based projects. He said the country had over 185.5 billion tons of coal reserves and if half of these resources were exploited, more than 100,000MW of power could be produced for 30 years.