Concerned that power supply from the Thar plant might be suspended if necessary machinery and equipment are not cleared.
The Sindh Engro Coal Mining Company (SECMC) has urged the energy ministry to open pending letters of credit (LCs) since April 2022.
The SECMC, working with the Sindh government to develop a coal mine in Thar, is having trouble opening Letters of Credit (LCs) to import machinery and spare parts for coal mines and power plants. “There’s concern that the production will halt. “.
The SECMC questioned why barriers were being put in place for importing plant machinery and equipment for the energy sector after the State Bank of Pakistan lifted the ban on opening LCs.
The Thar Coal Mining and Power Plant’s import and clearance of imported machinery and spare parts are also still pending, which raises the possibility of a suspension of coal production from the Thar coal mine.
The current winter energy crisis will worsen if coal production is stopped because it will stop domestic coal-fired power generation and result in a total power shortfall of 2,500 megawatts.
According to the SECMC, the SBP pre-approved the LC for importing goods covered by HS Code chapters 84 and 85 on December 27, 2022. By removing the condition, these items were moved up the priority list. Still, despite the SBP’s initiative, the LC documents for the spare parts and machinery for the Thar coal power projects are not being approved.
The SECMC informed the Ministry of Energy officials that it was having serious difficulties carrying out mining operations and using the imported equipment at the port because the LCs for importing critical parts and equipment were not opened. Due to the delay, heavy demurrage is also being applied.
According to the letter, the SECMC gave the cheapest 7.6 million tonnes of coal to three power plants in Pakistan so they could produce electricity, saving Pakistan a significant amount of foreign currency by displacing imported coal.
The company informed the authorities that Pakistan would incur an additional $40 million in costs by running three power plants on imported coal if Thar’s coal production was halted for a month.
The SECMC requested that the Ministry of Energy issued the LCs to the appropriate banks through the SBP, which has been pending since April 2022 for the import of equipment from the Chinese firm’s China Machinery Engineering Corporation and China Everest Development International Limited. “For the Thar coal project, approval should be guaranteed along with prompt approval of LCs for routine equipment. This will allow the mining process to proceed without interruption. “.
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