Supreme Court Orders Probe Into Failure of Samar Mubarakmand’s Thar Coal Project

Posted on Posted inBE2C2

OCT 11, 2018: The Supreme Court on Thursday ordered a probe into the failure of Thar coal power project initiated by Dr Samar Mubarakmand.

Defending his position, Mubarakmand said the underground gasification and power project was under the provincial government and began receiving funding from the federal government in 2012. By 2015, despite spending more than Rs3.2 billion on the project, it was only generating 8MW of electricity instead of 100MW as planned due to unavailability of development and operational funds.

Chief Justice Saqib Nisar ordered for an investigative committee to be set up to conduct an audit of the project. The bench also instructed for all project records to be handed over to senior lawyer Salman Akram Raja and the prosecutor general of the National Accountability Bureau (NAB). The case has been adjourned for a week.

The underground coal gasification refers to the process of turning the coal into synthetic gas or syngas without open pit mining of the resource.

The electricity will cost between Rs6 to Rs7 per unit at the current cost of production. “It’s much cheaper than the cost of power generation from open pit mining,” the managing director of the project Dr Muhammad Shabbir had told The Express Tribune in July 2016.

The National Electric Power Regulatory Authority (Nepra) in July 2017 approved new tariff of 7.23 cents (Rs 7.59) per unit for Thar coal-fired projects being developed by the Sindh Govt in partnership with Engro Mining and Power companies and other stakeholders. Exchange rate used then was Rs105/Dollar. At the present exchange rate of Rs137, the tariff would amount close to Rs10 per unit.

There was a sharp reduction in the project’s funds in fiscal year 2015-16 and zero allocation for the 2016 budgetary year which left the government’s much-touted Thar underground coal gasification (UGC) project high and dry.

More so, the federal budget for 2016-17 did not allocate funds for the project. In June, the prominent nuclear scientist and chairman of Underground Coal Gasification (UCG) project appealed to Chief Minister Murad Ali Shah to fully fund the UCG project as it would generate 100 megawatts electricity and end the power crisis.

Mubarakmand clarified to the bench on Thursday that at the time the government had not formally conveyed that the project was being shelved.

The pilot power production of 8MW began in May 2015. But the project’s commercial production of 100MW, as per the original plan, had not obtained the government’s nod of approval.

Around 250 people were employed in the project at the time and a majority of them lived in the project’s colony in Islamkot taluka of Tharparkar district.

The UGC project was approved in 2010 with a funding of Rs8.8 billion to produce 100 MW of electricity. It soon hit a snag and the funds as well as the generation target were drastically slashed.

But, the UGC team slogged through the financial bottlenecks and after years of striving got approval in 2014 for the pilot power generation of 8MW, the production of 5MW began in May, 2015. Presently, the UGC is producing around 1.5MW to meet the project’s electricity requirements.

Leave a Reply

Your email address will not be published. Required fields are marked *