KARACHI – The Sindh government has issued a termination warning to a Chinese company over the firm’s non-tangible progress and non-performance for the development of coal mine-mouth power generation project of 250MW in District Thatta.
According to a letter written to China National Machinery Import and Export Corporation (CMC) Project Manager Wang Xuequn by the Coal and Energy Development Department Sindh, the current state of affairs of the firm’ project is not in line with government’s efforts and it is regretted that CMC is not pursuing the project despite repeated requests and meetings.
Details disclosed that an MOU was signed between Sindh Coal Authority and CMC on July 29, 2005 for conducting a feasibility study for development of coal mine-mouth power generation project of 250MWs in Sonda Jherruck, District Thatta. Exploration License was granted by Directorate of Mines and Mineral Development, Government of Sindh on January, 2006 for an area of 56 sq km at Sonda-iherruk, for a period of one year and was extended for a further period of one year up to January 25, 2007.
Subsequently, Exploration License was converted into Mining Lease for 30 years on January 25, 2008 in the name of Global Energy Development Limited, a subsidiary/ local company of CMC registered in Pakistan. After a grant of Mining Lease, CMC (GED) was required to carryout all legal activities, according to terms and conditions of the grant as laid down under Sindh Mining Concession Rules, 2002.
The firm was required to apply for a Letter of Intent (LOI) from Pakistan Private Power Infrastructure Board (PPIB) and physical work on the project would be started. The Coal and Energy Development, Government of Sindh from the very beginning has been assisting the CMC for early execution of the project. In this regard, the Department, besides meetings with senior representatives of CMC, CMC Vice President Qin Ruijuan convened seven regular meetings to review progress of the project from April 22, 2009 till January 06, 2011.
During these meetings, the Department has been liaison with CMC and extending all possible cooperation for expediting execution of the project. In all these meetings, CMC promised improved performance to bring the project in execution mode and also applying to PPIB for issuance of LOI for power plant. CMC was even offered government of Sindh’s assistance if needed for expeditious implementation of the project as it was delayed inordinately. In order to facilitate foreign investment, Thar Coal and Energy Board have approved an attractive incentive package for the development of local coal mining and power projects.
Secretary to Government of Sindh, in the said letter, said that the PPIB Islamabad has been asking for latest status about the project and that when the project developers plan to apply for the LOI, while the response to the PPIB and NTDC references, which were discussed with the representative of the CMC on 6 January this, is still awaited.
It has been mentioned in the letter that Pakistan is currently going through its worst energy shortages, which has affected the entire economy as industrial growth is stunted, unemployment is on the rise, and general population is suffering due to frequent blackouts. The present government has assigned highest priority to the development of coal mining and power generation based on indigenous coal so as to provide long term energy solution and energy security to the country.
However, current state of affairs of the CMC’s project is not inline with the government’s efforts and it is regretted that CMC is not seriously pursuing the project, despite repeated requests and meetings, as no encouraging progress on the part of the firm is visible, the letter stated. It added that China is one of the closest allies of Pakistan and the Government of Pakistan assigns highest consideration for Chinese Companies.
“It is not understood as to what are the actual reasons due to which the company has not been able to move forward, so in view of the foregoing position, you once again, requested to expedite commissioning of the project and also furnish report on the PPIB references so that matter may be taken up with the quarter concerned,” the letter said.
Otherwise, the Department would be constrained to initiate proceedings in accordance with provisions of Sindh Mining Concession Rules on account of no tangible progress and non-performance by the firm, it said further.
