Again, on November 26, 2009, TCEB members discussed the draft before it was forwarded by the Sindh government to the Cabinet Division for endorsement. The Board did not foresee any hitches since, it points out, the proposal was in line with the President's and the Prime Minister's explicitly stated views on the subject. But it was in for a surprise.
Although, details are not available, considering its angry reaction the Cabinet Division's notification has ignored the draft proposal. The Managing Director of TCEB is reported to have sent a protest note to the Cabinet Division Secretary for issuing a "controversial" notification at a time the province is urging investors to come and develop the project.
He maintains that the notification undermines the TCEB's position as a one-stop facility which, he says, contradicts the President's and the Prime Minister's repeated assertions. Considering that the TCEB is not a mere provincial entity, it has good reason to protest.
Its members include the Sindh Chief Minister, Federal ministers for finance, law, water and power as well as Deputy Chairman of the Planning Commission. Which shows that its purpose is not just to look after the day-to-day affairs of the Thar Coal Project; it also has a role to play as an independent decision-making body. In which case, the Establishment Division should not be overriding its proposals.
The provincial government has put in a lot of effort and resources in the development of infrastructure for an integrated coal-fired power plants project. It has been ready for over two years to take off. At one point, a Chinese company, Shenhua, had almost signed an agreement to set up a coal-based power plant but then a dispute arose between the Centre and the province over tariff determination, and the company lost interest.
At the time, the Sindh government had accused regulatory agencies at the federal level of creating "frivolous and frictional impediments in allowing an up-front tariff." It had also maintained that pricing of coal is a provincial subject. Two years on, the issue remains unresolved. Meanwhile, power shortages have gone from bad to worse.
At a TCEB meeting a few weeks ago, Finance Minister Shaukat Tarin suggested that the government should set up a forum to arrange consultative meetings between the National Electric Power Regulatory Authority (NEPRA) and investors to decide indicative tariff. Given the magnitude of the current power crisis, the country can ill-afford to waste further time in bureaucratic wrangling. The federal government is required to urgently resolve the turf issue, ensuring also an expeditious conclusion of the tariff determination formula.