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2 January 2007 - USA's AES Corporation and Mitsui Group of Japan have been shortlisted to prepare two separate feasibility reports for Pakistan's first power plant that would use imported coal as fuel.
Both firms are to be issued approval letters to start assessing the cost and other aspects of a 1000 MW power plant project near Karachi. In response to an increasing reliance on imported furnace oil (fuel oil) for power generation, Pakistan's Private Power Infrastructure Board (PPIB) last August invited foreign investors to set up a coal fired power plant.
The two firms will take at least a year after the issuance of the letters to complete their studies on the project, which is estimated to cost between $1.3 and $1.4bn. The project will include the construction of the power plant, as well as of a jetty and a coal storage facility.
There remains a possibility that Karachi might allow both companies to set up two separate power plants of 1000 MW capacity each. A Pakistan government official was quoted as saying that this would depend on the result of their feasibility studies and the cost that the two companies would impinge on Karachi's budget for their construction.
Pakistan has made clear indications in recent months that it is looking at alternative fuels for the production of electricity. Strong demand for coal has pushed up its price in recent years but fuel oil, which is being blamed for increasing Pakistan's current account deficit, is still around twice the cost of coal and considerably more prone to price volatility.
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