Though it is too early to predict the fate of China Three Gorges deal with Thar coalfield especially in a turbulent environment of today, it might be interesting to shed some light on the factors that will likely shape the destiny of this investment. The allocation of Block IV of Thar Coalfield to China Three Gorges Corporation on the recommendation of the evaluation committee is sending the fission of excitement, at least through Thar Coal and Energy Board. For starters, Chinese investors stepping in the coalfields comes across as a streak of hope for the energy-starved country. The projects will develop an open pit mine of 20 million tons per year and mine mouth power plant of 3,000MW in two phases. In the midst of the severe ongoing power crisis with regular power cuts and blackouts, a major shift in the electricity generation mix is the need of the hour. Worldwide, the mix tilts towards coal clocking at 40 percent while power generation in Pakistan depends over 30 percent each on pricey oil and gas. With gas production falling short of demand and the oil import bill shooting up due to higher furnace oil prices, the country is left with a few options to electrify its power generation. Secondly, no doubt, Pakistan has abundant coal in Balochistan and Sindh. Studies confirm that the huge coal reserves in the Thar coalfield are estimated to be 175 billion tonnes, 94 percent of the total coal reserves in the country. Some of the myths about the quality of coal have been proven wrong as feasibility studies have revealed that around 5,000MW of power can be generated through this lignite. Moreover, the lignite is of consistent quality with a stripping ratio - volume of rock which must be mined to obtain 1 tonne of coal - of 6:1 and heating value of 11.6 MJ per kg which is comparable to that of India and Germany. Finally, and most importantly, the credibility of the Chinese investor, which was responsible for the construction of the largest hydro-electric power plant in 2008, plays a significant role in the execution of production process. The international strategy of China Three Gorges depicts a steady development of overseas contacting businesses. In CY10, 74 overseas projects built by China Three Gorges in 28 countries were in good progress; the overseas operating income accounted for 20 percent of the total operating income. Adhering to their focus on investments in hydro-power, the new contract bill of the Company reached a $1.52 billion mark in CY10. However, with the appeal come the hookups. A lot can be deciphered from the pace and progress in the past. In retrospect, the kind of attention that coal has received and the conflict of interests between the Federal and provincial governments over decades speak much about the fate of this recent partnership. Moreover, the bureaucracy and the strong petroleum lobbying in Pakistan have always put all such initiatives on the back burner. The progress has been slow with policymakers only rant about the potential of coal in the country. Besides, whats happening to foreign investment in the country is hidden from no one whether planned or coincidental, activities in the telecom and pharmaceutical sector is shooing away FDI. For all the glam, exploration and production is a tough business. An ambivalent environment as this, where foreign investment exits the economy over pennies, dampens the prospects of any new project. Notwithstanding the instability, things might work as wonders don cease.
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