Environmental effect of coal based power plants - Principles of Management

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Topic: Environmental Effect of Coal Based Power Plants
Instructor: Abdul Sami
Subject: Principle of Management
Group Members:
Sana Asim
Imran Hussain
Fazila Mukhtar
Fatima Motiwala
Abdul Aziz Afzal Siddiqui

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Engro Powergen Thar Private Limited (EPTL)
Engro Powergen Thar (Pvt.) Limited is a subsidiary Company of Engro Corporation Limited.
Type of Company: Private Limited Company
Type of Industry: Independent Power Producer (IPP)
Year of Established: 2014
Head Office: Clifton, Karachi
Leader of Project: Shamsuddin Ahmed Sheikh
Head of Project: Faisal Shafiq
History
Engro Powergen Thar Private Limited (EPTL) was formed in 2014 to set up a 2x330MW
power project in Thar Block II, Sindh, Pakistan. The Company is a joint venture between Engro
Powergen Ltd (EPL) (with 50.1% ownership), China Machinery Engineering Corporation
(CMEC), Habib Bank Ltd (HBL), and Liberty Mills Limited. EPTL’s power project will be the
pioneering project in generating electricity using indigenous lignite coal from the Tharparkar
district. /
An opencast mine in Thar is being developed by Sindh Engro Coal Mining Company
(SECMC), which will supply 3.8 Mt/a coal to EPTL. The power complex is expected to begin
supplying electricity to the national grid, that is, commence commercial operations, by June 2019.
It is designed to deliver gross capacity of 2×330 MW to the grid’s 500kV double circuit
transmission line from Thar to Matiari on to Jamshoro/Moro.
Environment of Organization
Culture
EPTL provides the opportunity to work in a dynamic workplace, combining the dual
benefit of working with a large conglomerate with the agility of a small business environment. At
EPTL, the aim is to provide professionals from all walks of life the opportunity to work in a
dynamic workplace that combines the dual benefit of working in a large conglomerate with the
convenience of a closely-knit business environment. The organizational culture is diversified and
incorporate workers that belong to different races, countries, norms and cultural background. The
Engro Powergen Thar Pvt. Limited has hired 50% of the local people for semi-skilled and unskilled
jobs. The other work force incorporates labors from different countries. The labor force
incorporates Chinese workers and Tharis workers.

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Competitors
There are no competitors as the industry is protected since there is only single buyer that
exist within the power sector. Engro Powergen Thar Pvt. Limited is introduced new and cheap
way of producing electricity. The Company has signed a contract with National Transmission and
Distribution Company (NTDC) as a single buyer of product produced by the Company. This
contract also includes that;
• The NTDC will buy electricity from the Company.
• If the Company fails to produce electricity for a specific time, due to overhauling or other
technical issues, NTDC will pay off fixed cost including profit.
Regulatory Group
There are several regulatory bodies, whose standards are followed by the Engro Powergen
Thar Pvt. Limited. The regulatory bodies are as follows;
• Sindh Environmental Protection Agency (SEPA): Environmental standards set by Sindh
Government.
• International Finance Corporation (IFC): International Environmental standards.
• National Transmission and Distribution Company (NTDC): it has rules & guidelines
for buying electricity.
• State Bank of Pakistan (SBP): foreign payments are made after approval of SBP.

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Organizational Mission
Plant operations and maintenance in a manner resulting in continuous supply to national
grid by harnessing human talent and local resources giving high priority to health, safety and
environment in a positive, sustainable and affordable way.
Organizational Vision
To ensure affordable energy and reliable operations thereby creating value for all stakeholders.
Problems Identified and Solutions
There are several problems that were identified during the project, which are prevailing
within the industry. The main problem was bad publicity and lack of awareness related to the
project. There were certain questions and issues raised with in the class, the solutions to those
problems are provided below;
Complicated Situation # 1: Coal is the only fossil fuel that is labeled as world’s greatest climate
threat, due to the fact burning coal produces CO2. The CO2 is a hot gas that raises the surface
temperature, hence contributing to Global warming and Standard Chartered being funder of coal
power plants throughout the world has withdrawn its funding due to environmental effects of coal
project on local residence.
Strategy: There are two guidelines that are set by Sindh Environmental Protection Agency (SEPA)
and International Finance Corporation(IFC). The Sindh Environmental Protection Agency (SEPA)
is the organization formed by the Government of Sindh to regulate environmental effects of this
project. The Environmental standards set by International Finance Corporation (IFC) these
standards are more stringent than the local standards set by SEPA; Moreover, The Health and
Safety Environment (HSE) culture of Engro is very strong because of which they perform third
party audits and consultancy services from German Company RWE to ensure scrutiny of
environmental standards. The foreign banks used to invest in coal projects in the 70s and 80s but
now the western banks have withdrawn their funding and no longer invest in these projects due to
environmental effect. In India, China and USA the coal power plants are still operating and
producing electricity for millions of households. The coal power plant project was initiated in
Pakistan due to China Pakistan Economic Corridor (CPEC) and Chinese banks. The Chinese
investors and banks are highly experienced in generating electricity via coal-based power plants
and follow standards for minimal environmental effects. Till 2013, these power plants were
operational in South Asia, Europe and USA.

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Media is exaggerating as India has being producing energy for more than fifty years. To
reduce dependency of electricity on other countries EPTL took initiative to produce electricity
through coal power plant. Alternatives energy plants such as solar and winds power plants require
a huge capital and these power plants are seasonal and cannot generate energy through-out the
year. Due to huge capital investment in renewables power plants, investors are not interested in
investing in this industry. The renewables power plants require thermal and fossil fuel to operate
and produce electricity. To construct these power plants in Pakistan, the government must borrow
loans from foreign banks and situation at present is not favorable as Pakistan is already under
financial crisis. However, Engro is planning to convert to renewable energies in the coming twenty
years.
Complicated Situation # 3: How to overcome water contamination in Thar due to coal-based
power plant?
Strategy: Engro has formed Thar Foundation to focus on different issues that are prevailing within
the territory of Thar. To overcome contamination, Thar Foundation has installed RO plants in four
different villages to purify water to make it drinkable for the villagers. The Engro is also focusing
on building RO plants in surrounding villages of Thar to de-contaminate the water. To change the
mind set of Thari people that the water is not poisonous, the Engro has planted vegetables and
harvested fishes in that water.
Complicated Situation # 4: The adverse effects faced by Engro, is the exaggeration of news
related to Thar project and negative publicity by the media which they reduced through CSR.
Strategy: This was the biggest challenge for Engro and they had to come up with various strategies
to convince the inhabitants of Thar that Engro is working for their development. The first execution
of strategy of EPTL was to formulate the Thar Foundation to tackle the prevailing issue. The Thar
foundation is getting 1% funding from mining project, which is utilized for the development of
people of Thar. Following are the initiatives took by Thar Foundation,
• In the EPTL project, 50% of the labors consist of Thari people. They are responsible to
carry out semi-skilled and unskilled jobs that are required at the plant.
• Vet camps are formed to provide vaccinations and medical assistance required by the
livestock.
• RO plants are setup for purification of water.

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• Marvi Clinic is setup to provide health care assistance to residents, which is an 80-bed
clinic and is equipped with latest medical equipment.
• Young engineers of Thar were given opportunity to visit china to obtain training for the
time duration of 6 months, to get knowledge and assistance for higher position in power
plant when it is operational.
• The students of Thar, who have passed matric, got opportunity for scholarships in different
Chinese universities.
• Diploma in Digital Skills Programs (DDSP) are setup to provide diploma in digital skills
to Thari People.
Conclusion
The main issue that we identified was the over exaggeration of facts and negative publicity
by the media. All the above-mentioned allegations were raised by media and other NGO’s. we
have proposed solutions and marketing strategies to overcome the over exaggeration of facts and
negative publicity. The solution that we provided the Company includes following propositions,
• Conducting seminars in different cities and public forums to enhance general awareness.
• Conducting field trip for students of different universities colleges and other educational
institutions.
• Initiate a campaign on electronic media and print media to spread awareness among people
that is related to benefits and economic effects of this project.
• Conduct annually meeting with EPTL’s Stakeholders especially with media and brief them
what positive steps EPTL has done for Tharis and how passionately EPTL is working to
reduce the environmental uncertainties.