Pakistan trying to win back World Bank loan Thar coal project

Sunday, 25 Mar 2012

The Express Tribune reported that the federal government is preparing a report for the World Bank to show that coal is a least cost option and convince the bank to re engage itself in the Thar coal and energy project. Earlier, the World Bank had withdrawn from its commitment of providing USD 30 million in loan for the Thar coal project.

Mr Ayaz Soomro Sindh Law and Parliamentary Affairs Minister said that the World Bank in a sudden and abrupt move told the government in November 2009 that it was not in a position to continue with the Thar coal and power project because of environmental reasons.

Mr Soomro who was responding to queries on behalf of Chief Minister Mr Syed Qaim Ali Shah who also heads the Coal and Energy Department said that the Sindh government then approached the federal government asking it to take up the matter with the World Bank.

Mr Soomro accepted that though MoUs had been signed with different companies over the last 5 to 7 years, no company could start coal mining and power production. Reasons behind this were non serious attitude, dearth of infrastructure, lack of incentives, low coordination between provincial and federal governments and failure to resolve tariff and coal pricing issues.

He said that the government had entered into joint ventures with Engro Group, China based Global Mining Company and others in four blocks of Thar. In addition to these, the provincial government has created Sindh Coal Development Fund with PKR 5,000 million for injecting its share of equity.

Mr Soomro said that for financing, a joint venture project has been included in the list of projects under the Pakistan and China Energy Working Group which will meet on April 15th 2012.

He said that work had started on a transmission line and constructing other infrastructure, including roads. About constructing railway lines in Thar Pakistan Railways in collaboration with the Thar Coal and Energy Board had given task to Pakistan Advisory Consultancy Services, a subsidiary of railways, to conduct a feasibility study for laying railway tracks up to the Thar coal field.

He added that an amount of PKR 21.9 million has been allocated in the budget. The government had already declared the Thar coal field as a special economic zone and a project of national security.

Source - The Express Tribune