The Thar Coal projects which can reduce the energy woes of the country are facing the federal government’s lack of seriousness and coordination with the provincial government. The Sindh Engro Coal Mining Company which has successfully reached the Thar coal project to the level of financing during the last around two years were unable to achieve the Project Financing and Financial Close of the project due to delay in accomplishment of infrastructure development and unresolved circular debt(of around RS 400 billion)in power sector. This was said by Khalid Mansoor President Engro Fertilizers in presentation to media here on Friday.
According to him the other challenges faced by the company were the low investor and financial institutions confidence for new initiatives by Engro due to gas curtailment for its newly commissioned Fertilizer Project including world’s largest urea plant with single largest private sector investment of $1.1 billion. Gas supply to the plant suspended by 55 percent of the time by SNGPL since commissioning, in spite of the contractual commitment of the government incurring huge losses to production. Only 75 percent of the agreed quantity was supplied by SNGPL during the supply period. He informed that despite the approvals from various bodies, there was no movement on practical grounds as projects like installing transmission lines, raw water supply, road network and effluent disposal were needed to have both federal and provincial governments’ serious considerations. Presently many questions were being raised from various corners that why the government was failed to generate power from the Thar coal and where did the announced and approved money go. The circular debt issue was one of the key hurdle in the way of inviting investments from investors as even the Board of Investment and Thar Coal Board were citing the debt issue as the big problem in raising investment for Thar coal projects. The government’s credibility, he said, was another issue as many projects such as IPPs have called in their sovereign guarantees and other government contractual obligations were just not being met in a number of sectors. Engro Power would have difficulty raising financing for Thar project due to gas curtailment on its new plant. Talking about the current status of the Engro project, the president said that, the bankable feasibility study of the project which will supply coal to at least 1200 MW mine-mouth power plant to be set up by Engro Powergen by 2016. SECMC has engaged several international consultants such as Sinocoal China and RWE-RE Gmbh of Germany which has completed the technical feasibility of the project. The expected date of completion of the coal mining and power project is 2016 at a cost of $3 billion. The SECMC project was ready to commence and close to getting into the project execution stage being able to attract financing and investors.
