Shanghai Electric Power Company to invest $2 billion in Thar Mining Block Two under CPEC

KARACHI: The Sindh government is expected to attract investment of around $4-6 billion by auctioning four new mining blocks of Thar coal reserves and handing over management of Thar airport to a private firm, Provincial Minister for Energy Imtiaz Ahmed Shaikh told The Express Tribune.

China’s state-owned firm Shanghai Electric Power Company Limited (SEC), which will likely invest over $2 billion in Thar coal mining and a coal-fired power project under the China-Pakistan Economic Corridor (CPEC), has recently kicked off civil works on the second mining block. The company would officially announce launch of the project soon.

Besides, a Saudi Arabia-based firm is engaged in negotiations with the federal government for investment in coal reserves. It aims to utilise coal for the production of gas, which it will use in fertiliser production.

“The Sindh Coal Authority (SCA) has decided to auction four more coal-mining blocks in Thar,” the provincial minister for energy stated after presiding over a SCA meeting on Tuesday.

“The meeting approved the holding of international bidding for the auction. Each block may attract investment of around $1-1.5 billion,” Shaikh said. The blocks which are ready for auction include blocks IV, VIII, X and XI. Domestic and international firms are already engaged in coal mining in two other blocks ie I and II.

Shanghai Electric, in collaboration with Sino-Sindh Resources Limited (SSRL), has already started mining work in block-II. The state-owned firm would invest over $2 billion in coal mining and setting up a 1,320-megawatt coal-fired power plant at the mine’s mouth, the minister said.

“SEC investment in Thar coal is part of CPEC project,” Shaikh said. The company is expected to start producing electricity by utilising Thar coal over the next two to three years.

CPEC’s official website suggests that SEC, in collaboration with SSRL, would invest a total of $3.21 billion in coal mining and the coal-based power project in Thar coal block-II. The company will be extracting 6.8 million tons of coal per annum. Besides, Sindh Engro Coal Mining Company (SECMC) is extracting coal from block-II. It has already launched two Thar coal-fired power projects of 330MW each in the recent past.

Three more companies are in the queue to launch three additional Thar coal-fired projects of 330MW each in block-II in the near future, he said.

Thar airport privatisation

The minister said the meeting also decided to hand over Thar airport’s – Mai Bakhtawar Airport – management to a private firm over the next two to three months.

He said they decided to call open bidding for handing over the airport management to a private firm. The airport was built at a cost of Rs1 billion over 1,000 acres of land in April 2018.

“The Sindh government will continue to own the airport. The plan is to run the airport under public-private partnership,” he said. The minister said the Civil Aviation Authority (CAA) had issued a licence to the Sindh Coal Authority (SCA) to run the airport.

“Earlier, we asked the CAA to operate the airport. However, it was costing Rs4.5 million a month. Therefore, we decided to operate it under the public-private partnership mode.” He said the airport was expected to operate one-to-two flights a day when Shanghai Electric launched the project in Thar.

At present, the airport which is named after a local legend Mai Bakhtawar is operating five to six chartered flights a month. The airport is mostly used by foreign and local investors, he said.