KARACHI: The Sindh government is in discussion with federal government to approve high tariff for coal based power generation in Sindh (Thar), Sources said.

Sources privy in the Sindh Mines and Mineral Department told that provincial government is eager to initiate power generation from its natural coal reserves, and after reviewing all the previous coal policies, it proposed the Federal Government to allow 9 to 9.5 cent per unit to the power producing companies at initial level, in order to attract more power producers from foreign countries.

The previous government had carried out some development work in the remote area of Thar, but there are many other development works required to build up better communication in coal rich area, he told on the condition of anonymity.

The provincial government also proposed to reduce its tariff rates gradually whenever an appropriate number of power producers start producing electricity through coal.

Initially it is proposed, he added, to create an attractive environment for power producers so that huge foreign investment could inflow in this sector and the energy deficiency of the country could be met.

Around 14 Memorandum of Understandings (MoUs) have been inked so far with a number of local and international companies for establishing power plants on indigenous coal. Majority of the signed power producers demanded government to fix power purchase rate not less than 10 cents to inject billions of dollars investment in coal based power generation.

But in the past government, National Electric Power Regulatory Authority (NEPRA) offered 7.5 cents per unit to the interested companies that was categorically rejected because it was unrealistic as the cost of power generation was more than that.

NEPRA’s stance is very clear that the power purchase should be linked with pirce of coal in international market. Thar coal deposits are estimated at 175.506 billion tonnes, which are sufficient to generate over 100,000MW electricity. The deposits are spread over an area of more than 9,100 square km, 140 km long (north-south) and 65 km in width (east-west). While, Sindh province has 98 percent of about 184.658 billion tonnes country’s total coal deposits.

Currently, Pakistan’s share of coal usage in energy has declined from 68 percent to 35 percent in 1958, and to five percent in 2002.

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