MoU signed to construct 105KM rail track in Thar Coal. An extraordinary contract ( 100% FDI of $170m on PPP model with no sovereign backed fixed ROI)

[Patriot forever]

ISLAMABAD: Pakistan Railways has stepped up efforts to construct a new 105kilometres rail track connecting Thar Coal Block II with new Chorr station on the Hyderabad-Mirpurkhas rail link.

Railway Constructions Pakistan Limited (RAILCOP), M/s Al Furqan Holdings Private Ltd, and BIL Pakistan Pvt Ltd signed a Memorandum Understanding (MoU) here to execute the project worth 170 million euro. The project would be executed under 100 percent Foreign Direct Investment (FDI) by Al Furqan Group UAE, CEO RAILCOP, Syed Najam Saeed said while addressing the MoU signing ceremony.


Najam Saeed said the project would provide new rail link from Thar Coal Mines to national railway network for ensuring availability of indigenous Thar lignite fuel throughout the country. He said it would give maximum coverage of all Thar Coal Mine Blocks and far-flung population centers in Tharparkar district while avoiding any existing infrastructural relocations.

Najam Saeed reaffirmed the mission of Minister for Railways Azam Khan Swati in transforming Pakistan Railways into a profit-making entity by initiating such Public-Private Partnership (PPP) projects. He also thanked Secretary/Chairman Railways, Habib-ur-Rehman Gilani, for his continuous support for the project.

Furthermore, Pakistan Railways and on behalf of RAILCOP, Syed Najam Saeed extended special gratitude to Tauseef Zaman, CEO, BIL Pakistan (private) Limited for his role in project. The CEO RAILCOP reiterated the vision of Prime Minister Imran Khan who stressed attracting FDI with lucrative incentives and policies to the investors in a competitive business environment.


He said that Pakistan Railways extended its gratitude to Ministry of Foreign Affairs for its endeavors to attract foreign investment in the country. This particular investment was possible with the efforts of Faisal Abro, an officer of the Foreign Service of Pakistan, posted at the Permanent Mission of Pakistan to OIC, who played an instrumental role in arranging this FDI of €170 million. Divulging the project details, Najam Saeed said that with every passing day, the need of rail link to connect Thar Coal mines with the existing railway system was gaining priority and urgency.

He said all the relevant authorities and stakeholders were preferring and urging to adopt rail as a primary mode of transportation for Thar coal as compared to highway mode. This new rail link would be helpful in the coal-driven energy projects executed under China Pakistan Economic Corridor (CPEC), he added.

Najam Saeed said the project would also create thousands of jobs which would boost investment in other associated projects, enhance export of coal, and have positive impact on macro-economic indicators.

MoU signed to construct 105KM rail track in Thar Coal - Daily Times

ISLAMABAD: Pakistan Railways has stepped up efforts to construct a new 105kilometres rail track connecting Thar Coal Block II with

dailytimes.com.pk

This will lower thar coal cost even more, which is already the cheapest base fuel.

For reference of cost of different fuel I am attaching the fuel cost/ kwh for 2nd half of Dec and let it speak for itself Thar coal against imported coal and RLNG cost ( mix of both long term 80% and spot 20% approx, spot at current international prices is more expensive than FO and long term guvnor has also defaulted on its long term Jan shipment).

This is purely fuel cost analysis not generation cost or overall cost after incorporating ROI or further down the capacity payments surcharge etc.

 

[_NOBODY_]

@farok84

 

[farok84]

@farok84

Hi,

This will help in reducing transportation cost for locally mined coal and help in its timely distribution and availability to different Coal based Power plants throughout the country.

The question that remains unanswered is, whether can we substitute imported coal with locally mined coal, without violating contractual obligations with imported coal fired power plants? I am not well versed in these contracts, so cannot make an informed comment. I remember when IK was inaugurating a Coal based Power Plant at Hub, he requested the operators to use atleast 20% of local coal, which reflects, the contracts signed are designed to neglect local coal usage in favor of imported coal. Why is this so, is anyone guess? All these contracts should have been signed for certain quality of coal (heating value, moisture content), if local coal is upto that quality, operators should have no issues in replacing imported coal with local coal.

None the less, it is a good infrastructure project specially when no government sovereign guarantees are involved and helps in ensuring availability of local coal to far flung areas and sales markets.

 

[Patriot forever]

Hi,

This will help in reducing transportation cost for locally mined coal and help in its timely distribution and availability to different Coal based Power plants throughout the country.

The question that remains unanswered is, whether can we substitute imported coal with locally mined coal, without violating contractual obligations with imported coal fired power plants? I am not well versed in these contracts, so cannot make an informed comment. I remember when IK was inaugurating a Coal based Power Plant at Hub, he requested the operators to use atleast 20% of local coal, which reflects, the contracts signed are designed to neglect local coal usage in favor of imported coal. Why is this so, is anyone guess? All these contracts should have been signed for certain quality of coal (heating value, moisture content), if local coal is upto that quality, operators should have no issues in replacing imported coal with local coal.

None the less, it is a good infrastructure project specially when no government sovereign guarantees are involved and helps in ensuring availability of local coal to far flung areas and sales markets.

Our coal is roughly half the caloric value of imported coal ( that differential is already accounted for in fuel cost/kwh, writing this for those who might confuse and say its cheaper because its caloric value is lower and use that to discredit like happened in the past).

I can not say for certain but I think these imported coal plants are designed to run at higher temperatures to attain the rated efficiency ( as bitumen by inherent properties burns hotter than lignite, also lignite is harder to burn). These coal plants have boiler sizes and running lignite vs high grade coal can not achieve the optimal output. Will require significant modifications in boiler size and boiler turbine arrangement ( if that is even possible).
Lignite coal plants are specifically designed are larger in size and are more expensive.
Maybe 20% is the most that we can mix to make these plants to run ( this shows government has considered this).

 

[313ghazi]

Hi,

This will help in reducing transportation cost for locally mined coal and help in its timely distribution and availability to different Coal based Power plants throughout the country.

The question that remains unanswered is, whether can we substitute imported coal with locally mined coal, without violating contractual obligations with imported coal fired power plants? I am not well versed in these contracts, so cannot make an informed comment. I remember when IK was inaugurating a Coal based Power Plant at Hub, he requested the operators to use atleast 20% of local coal, which reflects, the contracts signed are designed to neglect local coal usage in favor of imported coal. Why is this so, is anyone guess? All these contracts should have been signed for certain quality of coal (heating value, moisture content), if local coal is upto that quality, operators should have no issues in replacing imported coal with local coal.

None the less, it is a good infrastructure project specially when no government sovereign guarantees are involved and helps in ensuring availability of local coal to far flung areas and sales markets.

it's infuriating that such contracts were signed.

 

[fitpOsitive]

ISLAMABAD: Pakistan Railways has stepped up efforts to construct a new 105kilometres rail track connecting Thar Coal Block II with new Chorr station on the Hyderabad-Mirpurkhas rail link.

Railway Constructions Pakistan Limited (RAILCOP), M/s Al Furqan Holdings Private Ltd, and BIL Pakistan Pvt Ltd signed a Memorandum Understanding (MoU) here to execute the project worth 170 million euro. The project would be executed under 100 percent Foreign Direct Investment (FDI) by Al Furqan Group UAE, CEO RAILCOP, Syed Najam Saeed said while addressing the MoU signing ceremony.


Najam Saeed said the project would provide new rail link from Thar Coal Mines to national railway network for ensuring availability of indigenous Thar lignite fuel throughout the country. He said it would give maximum coverage of all Thar Coal Mine Blocks and far-flung population centers in Tharparkar district while avoiding any existing infrastructural relocations.

Najam Saeed reaffirmed the mission of Minister for Railways Azam Khan Swati in transforming Pakistan Railways into a profit-making entity by initiating such Public-Private Partnership (PPP) projects. He also thanked Secretary/Chairman Railways, Habib-ur-Rehman Gilani, for his continuous support for the project.

Furthermore, Pakistan Railways and on behalf of RAILCOP, Syed Najam Saeed extended special gratitude to Tauseef Zaman, CEO, BIL Pakistan (private) Limited for his role in project. The CEO RAILCOP reiterated the vision of Prime Minister Imran Khan who stressed attracting FDI with lucrative incentives and policies to the investors in a competitive business environment.


He said that Pakistan Railways extended its gratitude to Ministry of Foreign Affairs for its endeavors to attract foreign investment in the country. This particular investment was possible with the efforts of Faisal Abro, an officer of the Foreign Service of Pakistan, posted at the Permanent Mission of Pakistan to OIC, who played an instrumental role in arranging this FDI of €170 million. Divulging the project details, Najam Saeed said that with every passing day, the need of rail link to connect Thar Coal mines with the existing railway system was gaining priority and urgency.

He said all the relevant authorities and stakeholders were preferring and urging to adopt rail as a primary mode of transportation for Thar coal as compared to highway mode. This new rail link would be helpful in the coal-driven energy projects executed under China Pakistan Economic Corridor (CPEC), he added.

Najam Saeed said the project would also create thousands of jobs which would boost investment in other associated projects, enhance export of coal, and have positive impact on macro-economic indicators.

MoU signed to construct 105KM rail track in Thar Coal - Daily Times

ISLAMABAD: Pakistan Railways has stepped up efforts to construct a new 105kilometres rail track connecting Thar Coal Block II with

dailytimes.com.pk

This will lower thar coal cost even more, which is already the cheapest base fuel.

For reference of cost of different fuel I am attaching the fuel cost/ kwh for 2nd half of Dec and let it speak for itself Thar coal against imported coal and RLNG cost ( mix of both long term 80% and spot 20% approx, spot at current international prices is more expensive than FO and long term guvnor has also defaulted on its long term Jan shipment).

This is purely fuel cost analysis not generation cost or overall cost after incorporating ROI or further down the capacity payments surcharge etc.

View attachment 804589

This is another level of state and nation level haramipan. We will use thar coal, but we are not ready to mitigate the drought effects on Thar. We will not increase canals through thar.

Phir yeh log hathyar utha laingy tu ghaddar ban jaingy.....

 

[salarsikander]

it's infuriating that such contracts were signed.

You can thank Bloody Ganja in 1990s for that and PPP So called Shaheed Aurat for this

 

[farok84]

Our coal is roughly half the caloric value of imported coal ( that differential is already accounted for in fuel cost/kwh, writing this for those who might confuse and say its cheaper because its caloric value is lower).

I can not say for certain but I think these imported coal plants are designed to run at higher temperatures to attain the rated efficiency ( as bitumen by inherent properties burns hotter than lignite, also lignite is harder to burn). These coal plants have boiler sizes and running lignite vs high grade coal can not achieve the optimal output. Will require significant modifications in boiler size and boiler turbine arrangement ( if that is even possible).
Lignite coal plants are specifically designed are larger in size and are more expensive.
Maybe 20% is the most that we can mix to make these plants to run.

Hi,

So, it is about the quality of coal and not local (lignite) v/s imported (subbituminous) coal for these operators. Can't really blame operators for preferring imported coal then. Apart from low heating value of local coal, higher moisture content, ash and sulfur content will also be a concern.

 

[Bilal.]

It’s not just the power plants. Cement industry is a major user of coal. If they can be shifted to Thar lignite then there will be major savings.

 

[Patriot forever]

Hi,

So, it is about the quality of coal and not local (lignite) v/s imported (subbituminous) coal for these operators. Can't really blame operators for preferring imported coal then. Apart from low heating value of local coal, higher moisture content, ash and sulfur content will also be a concern.

Bro aren't the same Chinese (operators) involved in Thar coal power generation? It's no such thing as operator preference. China also produces lignite for power generation ( has both domestic brown and black coal and uses both).

Imported coal and RLNG for power generation costs us forex ( going indigenous will probably reduce our CAD by atleast 50% if not more) , negligible input to our economy ( basically thar coal is free, and the majority of mining costs directly contributes to our economy) , we can safely say 4x the fuel cost ( electricity tariff, along with the fuel adjustment surcharges every now and then etc).

The quality of coal is irrelevant when it comes to power generation cost matters. Infact lignite is preferred for local application because it is more cheaper to mine, less preferred where shipping cost is involved (more quantity of lignite).

Asfar as environmental impact is concerned its just a pot vs kettle thing.

 

[farok84]

Bro aren't the same Chinese (operators) involved in Thar coal power generation? It's no such thing as operator preference. China also produces lignite for power generation ( has both domestic brown and black coal and uses both).

Imported coal and RLNG for power generation costs us forex ( probably reduce our CAD by atleast 50% if not more) , negligible input to our economy ( basically thar coal is free, and the majority of mining costs directly contributes to our economy) , we can safely say 4x the fuel cost ( electricity tariff, along with the fuel adjustment surcharges every now and then etc).

The quality of coal is irrelevant when it comes to power generation cost matters. Infact lignite is preferred for local application because it is more cheaper to mine, less preferred where shipping cost is involved (more quantity of lignite).

Asfar as environmental impact is concerned its just a pot vs kettle thing.

Hi,

Yes, they are. But the process (sub-critical or super-critical) which is being utilized for steam/ power generation will dictate the use of quality of coal. Also, the percentage of stake in the project, will also change the operators decisions.

 

[Patriot forever]

It’s not just the power plants. Cement industry is a major user of coal. If they can be shifted to Thar lignite then there will be major savings.

Yes that is possible, but overall lignite is mainly used in power generation, bitumen is preferred in industries because it can burn at higher temperatures, steel industry in particular.

Our coal based industries did go from gas to coal ( when we started facing gas shortages) please correct me if I am wrong. They can do the same thing will probably require significant investment though ( if its possible) . That will do wonders for construction industry.

Fertiliser can also benefit from regasification plant in the future ( not in the short to medium term only when we run out of gas and can no longer support the industry on domestic gas) as syngas can never be as competitive as local natural gas.

 

[ziaulislam]

ISLAMABAD: Pakistan Railways has stepped up efforts to construct a new 105kilometres rail track connecting Thar Coal Block II with new Chorr station on the Hyderabad-Mirpurkhas rail link.

Railway Constructions Pakistan Limited (RAILCOP), M/s Al Furqan Holdings Private Ltd, and BIL Pakistan Pvt Ltd signed a Memorandum Understanding (MoU) here to execute the project worth 170 million euro. The project would be executed under 100 percent Foreign Direct Investment (FDI) by Al Furqan Group UAE, CEO RAILCOP, Syed Najam Saeed said while addressing the MoU signing ceremony.


Najam Saeed said the project would provide new rail link from Thar Coal Mines to national railway network for ensuring availability of indigenous Thar lignite fuel throughout the country. He said it would give maximum coverage of all Thar Coal Mine Blocks and far-flung population centers in Tharparkar district while avoiding any existing infrastructural relocations.

Najam Saeed reaffirmed the mission of Minister for Railways Azam Khan Swati in transforming Pakistan Railways into a profit-making entity by initiating such Public-Private Partnership (PPP) projects. He also thanked Secretary/Chairman Railways, Habib-ur-Rehman Gilani, for his continuous support for the project.

Furthermore, Pakistan Railways and on behalf of RAILCOP, Syed Najam Saeed extended special gratitude to Tauseef Zaman, CEO, BIL Pakistan (private) Limited for his role in project. The CEO RAILCOP reiterated the vision of Prime Minister Imran Khan who stressed attracting FDI with lucrative incentives and policies to the investors in a competitive business environment.


He said that Pakistan Railways extended its gratitude to Ministry of Foreign Affairs for its endeavors to attract foreign investment in the country. This particular investment was possible with the efforts of Faisal Abro, an officer of the Foreign Service of Pakistan, posted at the Permanent Mission of Pakistan to OIC, who played an instrumental role in arranging this FDI of €170 million. Divulging the project details, Najam Saeed said that with every passing day, the need of rail link to connect Thar Coal mines with the existing railway system was gaining priority and urgency.

He said all the relevant authorities and stakeholders were preferring and urging to adopt rail as a primary mode of transportation for Thar coal as compared to highway mode. This new rail link would be helpful in the coal-driven energy projects executed under China Pakistan Economic Corridor (CPEC), he added.

Najam Saeed said the project would also create thousands of jobs which would boost investment in other associated projects, enhance export of coal, and have positive impact on macro-economic indicators.

MoU signed to construct 105KM rail track in Thar Coal - Daily Times

ISLAMABAD: Pakistan Railways has stepped up efforts to construct a new 105kilometres rail track connecting Thar Coal Block II with

dailytimes.com.pk

This will lower thar coal cost even more, which is already the cheapest base fuel.

For reference of cost of different fuel I am attaching the fuel cost/ kwh for 2nd half of Dec and let it speak for itself Thar coal against imported coal and RLNG cost ( mix of both long term 80% and spot 20% approx, spot at current international prices is more expensive than FO and long term guvnor has also defaulted on its long term Jan shipment).

This is purely fuel cost analysis not generation cost or overall cost after incorporating ROI or further down the capacity payments surcharge etc.

View attachment 804589

Soverign back grantee is same as a loan(on books) but cost twice as much

We have to avoid these deals
Railway needs electrification

 

[Bilal.]

Yes that is possible, but overall lignite is mainly used in power generation, bitumen is preferred in industries because it can burn at higher temperatures, steel industry in particular.

Our coal based industries did go from gas to coal ( when we started facing gas shortages) please correct me if I am wrong. They can do the same thing will probably require significant investment though ( if its possible) . That will do wonders for construction industry.

Fertiliser can also benefit from regasification plant in the future ( not in the short to medium term only when we run out of gas and can no longer support the industry on domestic gas) as syngas can never be as competitive as natural gas.

Exactly. So the three avenues that should be followed to reduce import dependence and also cushion us from international price shocks should be moving cement industry to local coal, blending 80/20 in imported coal power plants and using syngas for fertilizer industry.

And of course all future baseload power should be based on Thar coal.

 

[Patriot forever]

Hi,

Yes, they are. But the process (sub-critical or super-critical) which is being utilized for steam/ power generation will dictate the use of quality of coal. Also, the percentage of stake in the project, will also change the operators decisions.

Bro IMO technically coal should dictate the process used not the other way around.

Coming to the 2nd point I wish we would used a different model of project financing ( but that is an another debate and is more depressing). Can be very seductive in countries like Pakistan and in Africa.