ISLAMABAD: The Council of Common Interests (CCI) approved on Wednesday a new 600MW power project at Jamshoro. The plant will use a mix of imported and Thar coal and will be set up with a $900 million loan from the Asian Development Bank.

A meeting of the CCI presided over by Prime Minister Raja Pervez Ashraf constituted an inter-provincial committee to investigate provincial governments’ complaints of over-billing by power companies and clear undisputed electricity arrears.

It approved regularisation of services of 105,000 lady health workers.

Federal ministers for communications, science and technology, inter-provincial coordination and railways, chief ministers of Sindh and Khyber Pakhtunkhawa, Governor of Balochistan and Punjab law minister, who represented the chief minister, and provincial chief secretaries attended the meeting.

An official said because of reservations of the ADB, the CCI decided to start the 600MW power plant with 80 per cent imported coal and 20 per cent Thar coal and gradually increase the content of Thar coal when it was able to enhance supplies.

The ADB, which is providing $900 million for increasing coal based-power generation, had expressed reservations on a government decision to utilise its loan for development of Thar coal and subsequent power generation. The bank observed that setting up the Jamshoro plant based on domestic coal was economically not viable as it had approved the financing of power plants to be run on imported coal.

It was, therefore, decided to start the project with larger imported coal content and gradually increase supplies from Thar. Water and Power Secretary Nargis Sethi and chief of Genco Holding Company Naveed Ismail were not available for comment.

The meeting was informed that while ADB’s assistance would help utilise Thar coal at Jamshoro plant the Japan International Cooperation Agency had also expressed interest in construction of the power plant and laying power transmission lines from Thar to Matiari.

The prime minister took notice of slow progress on an earlier direction of the CCI to the water and power ministry to ask generation companies to enter into an agreement with the Thar Coal Energy Board and directed that the arrangement should be finalised within seven days.

Prime Minister Ashraf also directed the ministry of finance to immediately process the Sindh government’s request to provide sovereign guarantees to a Chinese firm interested in mining Thar coal and setting up a power plant. The finance ministry told the meeting that the issue of sovereign guarantee would be taken up for approval at the next meeting of the Economic Coordination Committee of the cabinet.

The meeting was informed that outstanding electricity bills stood in access of Rs426 billion, including Rs93 billion against provincial governments. The provincial governments complained about over-billing.

The CCI constituted a committee comprising Minister for Religious Affairs Syed Khurshid Shah and Finance Minister Dr Abdul Hafeez Shaikh and chief ministers of the provinces concerned to reconcile figures, resolve disputes over over-billing and put in place a timeline for clearance of arrears. The provinces were asked to clear the undisputed amounts to improve cash flows in the power sector.

The prime minister said the issues of receivables was important because the federal government had injected Rs186 billion into the power sector this year and unless the provinces and consumers paid the bills it would be difficult to maintain power supply.

The meeting regularised services of 105,000 lady health workers. It was decided that the federal government would bear the financial cost – salaries and other expenses – till 2015 after which they would be taken care of by the provinces.

The CCI directed the provinces to take steps for timely payment of dues to sugarcane growers.

The prime minister informed the meeting that the decision to impose governor’s rule in Balochistan had been taken after consultations with all stakeholders and it was based on consensus. “In view of the deteriorating security situation, Article 234 of the Constitution was invoked and governor’s rule was imposed in Balochistan,” he said.