corridor project

1. 1

2. Introduction
2

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
3

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 PCS
CEO, Sindh Engro Coal Mining
Company.
3. Mr. Shahid Ali Seehar FSP DG, Thar Coal & Energy Board.
4. Mr. Tahir Ayub Khan Postal
MD, Coal Based Power Project,
Karachi.
5. Mr. Waseem Ahmed Jafri
Ex-Cadre
(ECP)
MD, Thar Coal & Energy Board
(TCEB)
4

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
5

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
6

7. Methodology
 Primary Sources
Meetings with concerned officials
Survey
 Secondary Sources
Newspapers/journals
Reports/Reviews
Economic Survey of Pakistan 2014-15
 Relevant Websites
7

8. Meeting with Additional Secretary
Energy Sindh8

9. 9

10. Currency of the Issue
10

11. 11

12. 12

13. 13

14. 14

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
15

16. Thar Coal Field16

17. Country 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%
17
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
18
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
19

20. Coal 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
20

21. Coal 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
21

22. Major Controversies Attached with
these Projects
Political Controversy
Environmental controversy
Regional Controversy
Economic Controversy
Feared dislocation of existing infrastructure/setups
22

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.
23

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
24

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
25

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
26

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
27

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
28

29. Role 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
29

30. Strategy - Short and Medium Term
Measures for the Timely Completion of
the Projects
30

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
31

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
32

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
33

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
34

35. SHORT TERM PLAN (1 – 2 YEARS)
S. No. Activity Responsibility
Resources
Time
Period
Outcome
Financial HR
Technic
al
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
35

36. SHORT TERM PLAN (1 – 2 YEARS)
S.No. Activity Responsibility
Resources Time
Period
Outcome
Financial HR
Technic
al
5.
Commyunity
Participation
Provincial
Govts Rs.100
Mn
-- --
Six
Monrths
It will
minimize
controversies.
6.
Mass Awareness
Campaigns
Provincial
Govts Rs.100M
n
-- --
Six
Monrths
It will
minimize
controversies
7.
Initial
Envirenmental
Examination
(IEE)
Respective EPAs -- -- --
Immedi
ate
Environment
al Protection
36

37. MEDIUM TERM PLAN (2 – 5 YEARS)
S.No
.
Activity Responsibility
Resources Time
Period
OutcomeFinan
cial
HR
Techn
ical
1.
Facilitation of
Stakeholders
Federal/Provincia
l Govts
-- -- --
Two
Years
It will attract
further
investment
2.
Removal of
differences b/w
Centre and Provinces
&among Provinces
Federal/Provincia
l Govts
-- -- --
Three
Years
Controversies
Removed
3.
Strengthening
Environmental
Regimes
Provincial Govts -- -- --
Three
Years
Environmenta
l Protection
4.
Proper Disposal of
effluent water
Provincial Govts Rs.
200
Mn
-- --
Three
Years
Environmenta
l Protection
37

38. LONG TERM PLAN (5 – 10 YEARS)
S.No. Activity Responsibility
Resources Time
Period
Outcome
Financial HR
Techni
cal
1. Equitable
Distribution of
Resources
Federal Govt
-- -- --
Five/Si
x Years
Economic
Prosperity
&
Provincial
Harmony
38

39. CONCLUSION
39

40. 40