http://www.dawn.com/2006/02/13/top7.htm
Thar plant expected to figure in Beijing talks
By Khaleeq Kiani
ISLAMABAD, Feb 12: President Gen Pervez Musharraf is expected to seek Chinese government’s support to start the $1 billion Thar coal-based power project during his visit to Beijing starting Feb 19, it is learnt.
“The government has accepted all demands of the Shenhua group, including the tariff it had originally solicited, but even then the project is not moving ahead,” an official told Dawn.
He said the problem was that the Shenhua group of China had lost interest in the project following the change of its status from the public sector organisation to a corporation.
“Top-level intervention from the two governments could get the project going and Pakistan would like this (Musharraf’s) visit to be fruitful as far as Thar project is concerned,” said the official.
The Sindh government and the Water and Power Development Authority (Wapda) have already made an investment of over Rs10 billion for the project.
The Shenhua group had originally demanded 5.86 cents per unit tariff for the 600mw Thar coal power project and later reduced its demand to 5.79 cents.
Wapda originally offered 3.2 cents while the National Electric Power Regulatory Authority assessed 4.2 cents as prudent tariff. The levelised tariff was, however, increased to 5.36 per unit in October at the instructions of Prime Minister Shaukat Aziz who wanted to kickstart the project involving friendly relations with China.
However, the company did not return, quoting infrastructure problems and its privatization by the Chinese government.
The sources said that President Musharraf constituted a committee in November to persuade the company to return to the project. The committee informed the government that the group was not ready to undertake the work even at 5.79 cents per unit.
Simultaneously, the committee kept on negotiating with AES Corporation of the United States as a back-up investor but did not get a positive response.