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Introduction
3
National Institute of Management, Karachi
21st Mid-Career Management Course
Simulation Exercise – I
“China-Pak Economic Corridor”
RAG – II
“China-Pak Coal Based Thermal Projects”
Sponsor ADS:
Syed Aijazullah Shah
1st March, 2016
4 Composition of RAG – II
S# Participant’s Name Service Assignment
1.Mr. Muhammad Tariq Jamil Khan (Leader)
Ex-Cadre (ISI)
Secretary Energy, Sindh
2. Mr. Riaz Hussain PCSCEO, Sindh Engro Coal Mining Company.
3. Mr. Shahid Ali Seehar FSP DG, Thar Coal & Energy Board.
4. Mr. Tahir Ayub Khan PostalMD, Coal Based Power Project, Karachi.
5. Mr. Waseem Ahmed JafriEx-Cadre
(ECP)MD, Thar Coal & Energy Board (TCEB)
5 Scope of Research and Analysis Group – II
To identify and assess the economic benefits Pakistan will get from these coal-based energy projects
To highlight the major controversies that are attached with these projects
To identify the role of Planning Commission, WAPDA, PPIB and Ministry of Finance
To identify the role of Environmental Protection Agency (EPA) and the reservation of international community on these projects
To prepare effective and workable strategy both at strategic and operational level for short and medium term for the timely completion of these coal-based thermal projects
6 Sequence of the Presentation
Introduction
Methodology
Currency of the Issue
Why Coal Based Power Projects
Coal Based Energy Projects - Economic Benefits
Major Controversies Attached with these Projects
Role of Planning Commission, WAPDA, PPIB and MoF
Role of EPA and the Reservations of International Community
Measures to be taken
Conclusion
7 Methodology
Primary Sources
Meetings with concerned officials
Survey
Secondary Sources
Newspapers/journals
Reports/Reviews
Economic Survey of Pakistan 2014-15
Relevant Websites
8
Meeting with Additional Secretary Energy Sindh
9
10
Currency of the Issue
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15 Why Coal-based Power Projects?
Proven Coal Reserves of about 185 billion tons available
175 billion tons in Thar region only
Electricity demand & supply gap is rapidly growing (5000MW to 7000MW)
China has committed the much-needed investment
Out of US$ 46 bn, US$ 33.97 bn earmarked for energy sector
Availability of abundant skilled and unskilled cheap labor.
Existing political will and the pragmatic leadership
India is successfully producing coal from Neyveli Coal Field with similar geological conditions as of Thar since 1960s
16Thar Coal Field
17Country Wise Share of Coal Based
Power
South Africa 93% Poland 87%
China 79% Australia 78%
Kazakhstan 75% India 68%
Israel 58% Greece 54%
Czech Republic 51% USA 45%
Germany 41% Pakistan 0.1%
Source: http//www.worldcoal.org/resources/coal-statistics
18 Major Coal Reserves
Region Coal (Million Tons)
Sindh: Lakhra, SondaThatta, Jherruck, Thar, Others 184,123
Punjab: Eastern Salt Range, Central Salt Range, Makerwal 235
Balochistan: Khost-Sharig-Harnai, Sor Range/Degari, Duki, Mach-Kingri, Musakhel Abegum, Pir Ismail Ziarat, Chamalong 217
Khyber Pakhtunkhua 90
Azad Jammu & Kashmir 09
Total 184,674
Source: Thar Coal Energy Board (TCEB), Govt. of Sindh
19 Major Coal Based Thermal Projects
1400 MW Power Project in Thar, Sindh
660 MW Engro Power Project in Thar, Sindh.
1320 MW Power Project at Port Qasim, Sindh.
1320 MW Power Project at Hub, Baluchistan.
1200 MW Power Project at Sahiwal, Punjab.
150 MW Power Project at Arifwala, Punjab
20Coal Based Energy Projects -
Economic Benefits
Meet growing energy needs
Reduce trade deficit by less oil imports
Cut down ever-mounting circular debt
Infrastructure development & resultant economic
windfall
Several thousands of new jobs will be created
21Coal Based Energy Projects -
Economic Benefits Socio-economic indicators ( literacy, health, etc.) will
improve
Development of indigenous mining sector & related expertise in the long run
Abundant energy will help revive industry & boost exports
Attract foreign investment
Export of electricity
22Major Controversies Attached with
these Projects
Political Controversy
Environmental controversy
Regional Controversy
Economic Controversy
Feared dislocation of existing infrastructure/setups
23 Planning Commission
A financial and public policy development institution under Ministry of Planning, Development and Reforms
Undertakes development initiatives for economic growth and the expansion of state infrastructure
Works under the Chairmanship of Prime Minister, assisted by the Deputy Chairman
The current Deputy Chairman is Mr. Ahsan Iqbal who is also the Federal Minister for Planning, Development and Reforms.
24 Planning Commission
Commission’s role is pivotal to timely materialization of CPEC
Commission can play key role in following ways:
To work as Think Tank to the Govt. regarding CPEC related projects
To assess and promote capacity development for optimum utilization
To make substantive contribution to policies for Govts
To encourage foreign investment in Power Sector
25 WAPDA
Autonomous and statutory body established in 1958 through a Parliamentary Act.
Works under a Chairman, who is assisted by three Members (Water, Power and Finance)
WAPDA has to play key role in CPEC in following ways:
Re-construction of existing transmission lines
Construction of Grid Stations and transmission lines adjacent to new power projects
Fixation of tariff and other ancillary jobs
26 PPIB
Private Power and Infrastructure Board (PPIB) was created in 1994
"One Window Facilitator" to promote private sector participation in power sector
Executes Implementation Agreement (IA) with Project Sponsors
Issues sovereign guarantees on behalf of Government of Pakistan
27 PPIB
Key role in CPEC related projects in following ways:
Ensure implementation of agreements made with private sector
Coordination with all the stakeholders
Meet deadlines to ensure timely completion of projects
Resolve differences through negotiations
Introduce best practices
Removing different procedural flaws and delays in documentations
Functioning as a focal department on behalf of Federal Govt and its Ministries
Executing and monitoring the power contracts and contractual obligations
28 Ministry of Finance (MoF)
Deals with the subjects related to national exchequer
Prepares annual budget statements and supplementary/excess budgets
MoF can play following roles as regard to power projects:
Timely disbursement of requisite funds for projects
Coordination with all stakeholders including provincial Ministries of Finance
Vigorously follow the policy of active pursuit of energy at all forums
29Role of Environmental Protection Agency (EPA)
and the Reservations of International Community
Role of EPA
National Impact Assessment Programme (NIAP)
Environmental Impact Assessment (EIA)
Strategic Environment Assessment (SEA)
Meeting PAK-EPA NEQS
Reinforce EIA Mechanism
Institutionalize SEA Mechanism
Formulation of Comprehensive Guidelines and Task Forces
30
Strategy - Short and Medium Term Measures for the Timely Completion of
the Projects
31 Short Term Measures
Availability of Financial resources by Federal as well as Provincial Governments
Provision of Fool Proof Security
Timely execution of already approved projects/schemes
Infrastructure Development in project areas
Cut down in Technical and Bureaucratic rigmarole to ensure speedy accomplishment of assigned projects
32 Short Term Measures
Simplification and Streamlining of Regulatory Mechanisms
Environmental Impact Assessment of all the projects to be carried out according to international standards
Community Participation
Mass Awareness Campaigns
33 Medium Term Measures
Facilitation of Investor, Lender and Power Producer
Removal of differences between Centre and Provinces & amongst Provinces.
Equitable distribution of economic returns from CPEC – related projects among provinces
Strengthening of Environmental regimes in Pakistan through reforms in PEPA and NIAP in order to comply by international environmental standards
34 Medium Term Measures
Community Development in the project area should be
prioritized in order to avoid any displacement
Drainage of the effluent water from project area into the
sea after thorough scientific treatment in order to save our
Marine Eco System and to avoid any objection from
international marine watchdogs
35 SHORT TERM PLAN (1 – 2 YEARS)
S. No. Activity ResponsibilityResources
TimePeriod
OutcomeFinancial HR
Technical
1.Provision of Fool Proof Security
Federal & Provincial Govts
Rs. 600 Mn
1000 100 Six Months
Project Secure
2.Infrastructure Development
Provincial Govts -- -- -- Six Months
Timely Completion of Project
3.End to Red Tapism
Provincial Govts -- -- -- Six Months
Timely Completion of Project
4.Simplification of Regulatory Mechanisms
Provincial Govts -- -- --
Six Months
It will attract further investment
36 SHORT TERM PLAN (1 – 2 YEARS)
S.No. Activity Responsibility
ResourcesTime
PeriodOutcome
Financial HRTechnic
al
5. Commyunity Participation
Provincial Govts Rs.100 Mn
-- --
Six Monrths
It will minimize controversies.
6. Mass Awareness Campaigns
Provincial Govts Rs.100Mn
-- --
Six Monrths
It will minimize controversies
7.
Initial Envirenmental Examination (IEE)
Respective EPAs -- -- -- Immediate
Environmental Protection
37MEDIUM TERM PLAN (2 – 5
YEARS)S.No
.Activity Responsibility
ResourcesTime
PeriodOutcomeFinan
cial HR
Technical
1.Facilitation of Stakeholders
Federal/Provincial Govts
-- -- --Two Years
It will attract further investment
2.
Removal of differences b/w Centre and Provinces &among Provinces
Federal/Provincial Govts
-- -- --Three Years
Controversies Removed
3.Strengthening Environmental Regimes
Provincial Govts -- -- -- Three Years
Environmental Protection
4.Proper Disposal of effluent water
Provincial Govts Rs. 200 Mn
-- --Three Years
Environmental Protection
38 LONG TERM PLAN (5 – 10 YEARS)
S.No. Activity ResponsibilityResources Time
Period OutcomeFinancial HR Techni
cal
1. Equitable Distribution of Resources
Federal Govt
-- -- --
Five/Six Years
Economic Prosperity & Provincial Harmony
39
CONCLUSION