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Work on Thar coal to begin next year

Engro has announced plans to set up its Thar coal power plant in the next two-and-a-half years, Engro Powergen CEO Shamsuddin Ahmed Shaikh said on Friday evening.

Work will start on project site between January and February next year and proceed till the target date. “We’ve completed our technical studies and conducted the prequalifying of contractors,” Shaikh said. He added that “Good people are showing interest in the project – like the Chinese and Koreans.”

The Powergen CEO was addressing a gathering of journalists at an event at a local hotel organized by Engro Corp to showcase a report on the energy sector commissioned by the company.

“We’ve gotten the NoC for open cast mining from the Environmental Protection Agency and also looked into financing,” said Shaikh.In this regard, he said that the Asian Development Bank has expressed its willingness to partner with Engro.

“Even if you divorce the political issues associated with projects like the Kalabagh Dam, it’ll still cost between $12 billion and $15 billion.” “The ADB doesn’t have that kind of money for Pakistan at the moment – which is why they’re open to smaller projects.”

According to Engro, the Thar coal project will produce electricity at Rs12 per unit, as compared to Rs 23 per unit by gencos and Rs18 per unit by IPPs. This is why the company is pushing coal so aggressively. “The current situation on energy is not sustainable,” argued Engro chief Ali Ansari.

“We need to shift away from the usage of expensive fuels, especially by inefficient plants. Priority in fuel supply should be accorded on the basis on efficiency.” The Engro study puts the annual savings from converting oil-run plants to coal at about $3billion a year. “Since the conversion of the plants will cost about the same, you’re actually looking at a payback within the year,” maintained Ansari.

However, in the immediate term, the company sees no option to the energy crisis but to import LNG. “It will take at least 10 years for Thar coal to effectively dent the energy crisis,” said Ansari. “In the meantime, you can try and plug the leaks like theft and the system losses but the most important thing is for the government to give price signals. “ “It doesn’t make economic sense to keep supplying electricity at Rs8 per unit for all consumers when the production cost is so much higher.”

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