KARACHI, July 18: The Privatisation Commission will soon invite bids for sale of Lakhra Coal Development Corporation (LCDC) set up in 1992 near Jamshoro for mechanised mining.

A team of the commission held a meeting with mines and minerals secretary in Karachi on Wednesday to discuss the terms of the mining lease to be offered to the selected bidder.

The corporation was set up as a joint venture between the federal government and Sindh government, with the latter having 25 per cent share in the equity.

The main function of the LCDC was to extract coal and supply the same to a 150MW Wapda power plant in the area. It, however, failed to achieve its objectives.

Sources said that the corporation could not supply coal in the desired quantity to the power plant which due to faulty equipment could not produce power more than 30 to 40MW. The corporation, however, resorted to sell the surplus coal in the local market. The new investor would be required to arrange mechanised coal mining in an area of 8,000 acres and install a power plant based on coal-generation, but there would be no sale of coal in the open market.

The sources said that though the corporation was earning Rs30 to 40 million from local sale of coal annually, the government wanted the coal to be used exclusively for power generation, hence it has been decided to privatise the same.

LCDC managing director Zahid Majid was not available to comment on the performance of the company.

However, the corporation in its annual report said that the Lakhra Power Generating Company Limited (LPGCL) had three units of 50MW each.

Two out of three units remained under operation and during the year the plant’s working capacity was only 16.5 per cent.

The LCDC had to reduce its coal extraction due to the power plant’s production below the normal working capacity.

It further said that the production and sales targets of LCDC were adversely affected because only 124,126 tons could be sold from its mines.

The report said that due to slump in the coal market, the corporation could only sell 61,605 tons in the open market as against a target of 80,000 tons set for the 2007-08.