ADB fears centre-province rift may impede uplift

Development of Thar coalfields may be hampered due to provincial ownership of resources and federal control of market. Sources told Business Recorder on Friday that Asian Development Bank (ADB) in its Thar lignite (coal) Development Programme for Electricity presented to the government stated that developing coal sites in Sindh, it was necessary to avoid possibility of conflicts between the province and the federal government.
The ADB mentioned the issue in the International Finance Corporation experience in December 1994. The ADB declared the Thar lignite was a feasible fuel for electricity generation and the closest large-scale utilisation experiences available in the mining and utilisation operations in Poland.
The purpose of presentation was to achieve mutual knowledge and understanding of the nature of the Thar lignite deposits and to show that full development of the Thar lignite resources is not an impossible task, sources said.
Another purpose was to illustrate the diverse nature of the activities that need to be given attention downstream from where the development works were standing, they added.
The Bank observed that the Thar lignite was not feasible to transport because of high moisture and tendency towards spontaneous combustion. “Spontaneous combustion can occur in the lower rank coals and transporting run-of-mine lignite means transporting 50 percent moisture.”
The ADB suggested that in the province mining should be mine-mouth to obtain huge quantity of coal for proposed large-scale power generation. Coal from single surface mining operation would reduce bus-bar electricity production costs to levels acceptable to Pakistan’s Private Power and resolve the problem that has caused failure of the several power generation projects launched since the announcement of the Thar lignite discovery in April 1994, sources quoted ADB.
The ADB said, “set the mining capacity to the largest output practical from world-wide experience, which lies between 20 to 30 million tonnes annually. The incentive is the production of run-of-mine lignite at minimum cost.”
Over the next 16 years, the country needs new installed capacity at the average rate of about 2,400 MW annually, to total the about 37,000 MW over the period, the ADB identified and said that coal-fired power generation might play vital role.
If 37,000 MW electricity obtained from Thar coal then the estimated coal of the area by United States Geological Survey and Pakistan Geological Survey is 78,197 million tonnes that is sufficient for next 314 years.
Three alternative electricity generation technologies are available for consideration that are: pulverised Coal Combustion -Steam Turbine Generation; Circulating Fluidised Bed Combustion – Steam Turbine Generation and Coal (Lignite) Gas – Combined Cycle Generation.
Private sector had been urged to come forward to fill ‘pothole’ and proceed in accordance with whatever policy government set on the desired life of the resources.
About power purchase agreement, the ADB said, “filling the pothole requires a broad, rather than a tunnel, vision on the part of the regulating agencies such as by performing economic, not financial, benefitscost analyses to determine whether economic benefits exceed the increment cost of a higher tariff than desired.”
One of the biggest impediment to develop Thar coalfields is fresh water, the ADB suggested that it could be brought from the Indus River through a canal by reconsidering current allocations of Indus water.

Copyright Business Recorder, 2007