Thar coal development: Chinese firm seeks levies exemption on machinery import

Chinese company, Shenhua Group, has asked the Government of Pakistan for exemption of levies on the import of machinery to be used in the development of Thar coal, which will help in reducing the expenses of the company on power generation. An official of the Petroleum and Natural Resources Ministry told Business Recorder here on Tuesday that the ministry has received the demand of the Shenhua Group regarding levies exemption and would try to resolve the issue jointly with other concerned institutions such as the Central Board of Revenue and the Industries and Production Ministry, etc.
Sources said that it would not be a big deal if the government allows some sort of exemption to the Chinese group regarding import of machinery. The customs duty is 5 percent, while the sales tax is 15 percent, but it will have a good impact on the power tariff and new investment opportunities in the area.
"If we will give exemption to the Chinese company it will work as a lucrative incentive and will attract more investment in the area," the sources claimed.
If the government is demanding cheap electricity rates from Shenhua Group then they must give some relief to them in terms of levy exemption to some extent, they said.
"There are 176 billion tonnes of coal reserves in Thar. The deposits have been divided into four blocks and a Chinese firm is preparing feasibility of the first block." The Chinese company will complete its work on feasibility study in early 2005.