After years of hollow promises, a landmark agreement was signed on Monday to finance Pakistan’s first open-pit coal mine in the natural-resource rich Tharparkar district, which boasts holding 180 billion tons of coal but could not be exploited since it was discovered in the early 1990s. A consortium of local banks that include HBL, UBL and Bank Alfalah will lend $500 million (Rs50 billion) – one of the largest project financing deals in recent years – to Sindh Engro Coal Mining Company (SECMC), a joint venture between Sindh government and five private companies. This agreement is part of the $2-billion project, which includes a mine with a capacity to produce 3.8 million tons a year of coal and a 660MW coal-based power plant. This has all but sealed the project’s financial close, which is expected to be finalised in the next two months.It is no surprise that a population starved for energy and flooded with unfulfilled promises of ending power outages will be cynical at any announcement related to Thar coal. Nevertheless, the project could prove to be crucial in fulfilling the promise of ending power outages and moving a step closer to seeing power generation from over 180 billion tonnes of coal lying underground in one of the poorest areas of Pakistan. It is quite ironic that an area so completely neglected by the Sindh government is now where initiation of development work has become so crucial. Despite the importance of the project, the authorities need to take into account the consequences of underground coal gasification likely to contaminate nearby water reserves. While private companies have assured that emission guidelines set forth by the World Bank and the International Finance Corporation will be followed, the Sindh government needs to make sure that this is indeed the case. It also needs to ensure that the financial close of the project is achieved in the next two months, as promised. Work on the coal mine and power plant would be completed by 2018 if hurdles are tackled efficiently. There is bound to be scepticism regarding the promises that have been made vis-vis the project, when one sees that the government handling the issues is that of Sindh, which does not exactly enjoy a healthy reputation to say the least. Sindh has remained a trouble-ridden province with the rural areas giving a true picture of the government’s incompetence.
pk.shafaqna.com
