The good news

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Discovery of iron ores and government’s priorities

A euphoric Shahabaz Sharif has congratulated the nation on the discovery of huge iron, copper and gold reserves in Chiniot district. Laboratories in Canada and Switzerland have reportedly certified that the quality of iron ore deposits was at par with those in Brazil, Russia and India. Another good news: the find would provide jobs to about 100,000 people. One hopes that the government has conducted studies of various aspects of the project including its funding.

In 1956, German group Krupp proposed a joint venture with PIDC to set up a steel mill based on Chichali/Kalabagh iron ore. In 1967, another German company Salzgitter offered to establish a steel mill of 0.8 million tons per year capacity after carrying out comprehensive full-scale industrial tests on the indigenous iron ore that extended over a period of three years or more. The governments were not in a position to provide their part of the funding so the projects failed to see the light of the day.

The failures are now being ascribed to the incompetence of the former governments which is only partly true. The experience of the $1.6 billion Thar Coal project, launched jointly by Nawaz Sharif and former President Asif Ali Zardari with great fanfare on January 2014 has also been delayed due to lack of funds. Nine months after its inauguration the World Bank backed out of the project over pollution concerns and the Chinese banks expressed reluctance to extend loans against sovereign guarantees. It would have been able to supply 660 megawatts of electricity to the national grid by the first quarter of 2018 only if the project’s financial closure is achieved this year. Will this be possible?

Nawaz Sharif says if his government had enough funds, it would immediately initiate projects to provide 10,000MW electricity. No government, however rich, has unlimited funds. Every government has to determine its priorities. If power generation or education and health were a priority, the costly extension of the Motorway and the Metro bus projects would have been postponed.