It may be a case of overreaction on the part of the Sindh government when, according to a report, it suspects the federal government of having hatched a conspiracy against the province's integrated coal-fired power plant project, but it certainly has a valid reason for complaint.
At a recent meeting, the provincial cabinet expressed deep concern over the fact that even though work on the construction of infrastructure had been completed, the coal-based power project had made no progress.
The level of concern is reflected by an unusually critical letter the Caretaker Chief Minister, Abdul Qadir Halepota wrote last month to Caretaker Prime Minister Mohammadmian Soomro. It says, "regulatory agencies at the federal level have not been supportive. On the contrary, frivolous and frictional impediments are being created in allowing upfront tariff, which is the only way forward for integrated coal-fired power plants."
As the contents of the letter show, at issue has been the question of tariff determination. The National Electric Power Regulatory Authority (Nepra) had determined levellised upfront tariff of 7.8 cents per kw, which was unacceptable to the provincial government. Wapda, however, had agreed that upfront tariff needed to be determined for different coalfields with the price of imported Indonesian coal serving as a benchmark, and based on the calorific value the two sides had even arrived at an agreed price.
To the provincial government's chagrin, the federal government's advisor on energy, Mukhtar Ahmad, intervened to state that Nepra should not allow upfront tariff, proposing instead competitive bidding. The provincial government holds that this procedure has not produced the desired results. It cites the case of a Chinese company, Shenhua, which started off as a keen investor, but disheartened by the 'frivolous and frictional' environment lost interest and made its exit from the scene.
As a matter of fact, this is not the first voice of disappointment from Sindh in the context of Thar coal power project. Last November the then chief minister, Dr Arbab Rahim, had expressed similar views, accusing 'vested interests' in the federal government of obstructing plans to exploit Thar coal for power generation.
Sindh's exasperation is understandable given that the provincial government spent some three billion rupees to construct infrastructure to support an integrated coal-fired power project having a capacity to produce up to 1000 mw. It had even signed MoUs with several companies. Yet things remain at a standstill, eroding the province's trust in the Centre's willingness to remove 'impediments' and overcome the 'vested interests.'
To say the least, it is unfortunate that despite its best efforts the Sindh government finds it cannot put such an important source of power production as coal to good use. All the more so in view of the fact that the country faces an unprecedented energy crisis, which is only going to worsen in the years to come unless urgent measures are taken to exploit all available sources of energy. It is about time the federal government took a serious notice of Sindh's criticism of its attitude, and makes good faith efforts to reach an amicable resolution of the pricing formula.