Thar coal gasification project may be delayed: finance unable to release funds

Thar coal gasification project, to generate 100 mw electricity, is expected to be delayed as the Finance Ministry has been unable to allocate the required Rs 5.703 billion for the project in the current fiscal year owing to financial constraints, despite intervention by the Presidency, it is leant.
Sources told Business Recorder that the Deputy Chairman of Planning Commission in a report complained to the President that the Finance Ministry was not releasing funds for one of the projects of national importance, designed to generate 100 mw electricity.
Total cost of two 50 mw power plants from Syngas was estimated at Rs 8.898 billion, and the Finance Ministry was requested to allocate Rs 5.703 billion in the current fiscal year, and the remaining Rs 3.193 billion in fiscal year 2012-13, for purchase of steam and gas turbines to generate electricity. Only Rs 5 million was allocated by the economic managers for the current fiscal year for the project. Subsequently, on the directives of the Presidency, a meeting was held at the Ministry of Finance, which led to the approval of an additional Rs 900 million for the project.
An official said that the President on receiving report from Deputy Chairman, Planning Commission, was upset and wanted to know why funds for the project had not been released. The Presidency reportedly asked Finance Minister Dr Abdul Hafeez to chair a meeting which would include Chief Minister Sindh, Deptuty Chairman Planning Commission and member Planning Commission, Science and Technology to resolve all issues pertaining to the project.
An official of the Planning Commission said that the projects "Creation of new processing facilities (for production of Coal Gas by Underground Coal Gasification)" and "Creation of new processing facilities (for handling and purification of Coal gas produced by Underground Coal Gasification)" were approved by Central Development Working Party (CDWP) in 2009 at a cost of Rs 494.45 million and Rs 490.48 million respectively. The projects are now in full swing with the first 50 mw gasifier to produce Underground Coal Gas (UCG) has been completed.
According to him, Rs 639.2 million was released to both projects out of which Rs 636.8 million has been utilised so far. The project "2x50 MW Power Plant from Syngas (Integrated gasification Combined Cycle (IGCC-2009)" was approved by Executive Committee of National Economic Council (ECNEC) in 2010 at a cost of Rs 8898.7 million and was not allocated any funds in Public Sector Development Program (PSDP) 2010-11 due to economic crunch.
However, in PSDP 2011-12, only a negligible amount of Rs 5 million was allocated against the demand of Rs 5703 million. Major component of the project is purchase of power plant (steam and gas turbines) to generate electricity. Gas turbines can not be purchased in parts and need an allocation of Rs 5703 million in PSDP 2011-12. The balance amount of Rs 3195.5 million will be needed in PSDP 2012-13. Another official said if funds are not provided in time the project''s progress would be severely affected.