KARACHI, July 30: To present Sindh’s case on various contentious issues at a meeting of the Council of Common Interests (CCI) to be held in Islamabad on Wednesday, a preparatory meeting presided over by Sindh Chief Minister Syed Qaim Ali Shah was held in the CM House on Tuesday.

Sources told Dawn that Sindh, among other things, will take up the issue of at-source deduction of Rs5.5 billion from its share in the National Finance Commission award to pay ‘disputed’ electricity bill of the Water and Power Development Authority.They said that Sindh was of the view that such a unilateral decision of the federal government was a violation of the CCI’s earlier decision made in January 2013, which stated that the centre could not deduct Sindh’s share more than Rs2.5 billion till reconciliation of disputed power bills.

They said the Sindh government had also finalised its recommendations for the draft National Power Policy 2013-2018, which suggested that utilisation of Thar coal be given due importance in the policy to overcome the power shortage in the country.

The Sindh government recommendations also demand that Thar coal be included in the policy.

The province says that Thar coal is future power generation hub of Pakistan. Both national and private utility companies such as the Karachi Electric Supply Company will get power from Thar coal. The implementation agreement (IA) arrangement is available for power supply to the national grid only and there is no IA scheme available in case power is evacuated to the KESC.

“The power policy of 2002 restricts grant of any protections for private utilities if private to private deal is made. This aspect needs to be addressed in case of the KESC as Thar coal has also major market at Karachi and some limited protections can be offered in the new power policy,” suggests Sindh.

It adds that the conversion of all existing power plants be made with Thar-equivalent coal. “New power policy needs to reflect its commitment towards maximum use of local coal and in long term use of only local coal be made ‘mandatory’ with certain time frame to promote indigenous resources,” says the province. Location of imported coal-based power plants will be suitable near seafront keeping in view of transport costs. Thus the proposed power policy should encourage location of new plants on the coast of Thatta and Badin as they are near major coalfields of Sindh and will involve least transport costs and easily converted to indigenous coal.

Referring to the Economic Coordination Committee’s decision on Oct 15, 2010, which declared the Thar Coal and Energy Board (TCEB) as the coal pricing agency in Sindh, the Sindh government suggests that this should be reflected in the proposed power policy. This aspect will clarify doubts if any regarding provincial mandate of mineral pricing and its acceptability by Nepra, in case of determination of power tariff. The province suggests that the ‘concept of provincial grids and tariff setting bodies’ be introduced in the proposed power policy.

Highlighting the need for huge investment for use of Thar coal reserves to overcome the energy shortage, Sindh demands that the federal government pledge investment to this effect in the power policy.

Furthermore, it says that transmission network development be prioritised in the policy in case of Thar and coastal areas of Sindh linking Karachi and Thar.

“TCEB should be reflected in proposed power policy as competent forum to approve coal mining and power projects based on Thar coal,” says the province, adding that in order to attract private/foreign direct investment in Thar, fiscal incentives for mining and power projects at Thar as approved by the ECC on Oct 15, 2010 be properly highlighted in the power policy.

It also demands that the TCEB be authorised to process ‘sovereign guarantee’ for public sector projects for mining and power projects based on Thar coal.

For another issue pertaining to proposed amendments to petroleum products, that was also on agenda of the recent CCI meeting presided over by the prime minister, the sources told Dawn that the meeting chaired by the provincial chief executive also discussed and made paragraph-wise suggestions/comments on the proposed petroleum policy.

For instance, referring to paragraph 5 of the draft summary of the proposed petroleum policy pertaining to ‘supplementary agreements’, the Sindh government in its input had contended that the reasons given were not justifiable as they had “caused unnecessary delay in the conversion to the Petroleum (exploration and production) Policy 2012. It apprehended that the same might cause more difficulties and confusion in the future.

“The government cannot assume that without the signing of supplementary agreements, the companies concerned are deemed to have converted to the new policy especially since the policy itself sets out that the guidelines and requirements of supplementary agreements be carried out,” said Sindh. It added that the proposed amendment to remove the time limit of six months was not ‘feasible’ as it was likely to allow the government to ‘delay’ the process further and continue to take a ‘laid-back approach,’ which might be detrimental in the long run.

“It is proposed that a fixed time frame may be put into place through rules and regulations for implementation of the policy on an immediate basis rather than allow amendments to cause further delay,” suggests the province, adding that ‘a reasonable time’ be allowed for the same and that the proposal in Paragraph 8 be ‘reconsidered’ and a time limit be fixed to ensure efficiency in implementation.

Similarly, on its comment for proposed paragraphs 9 and 10 of the Petroleum Policy, the Sindh government says that this clause may cause an ‘anomaly’, which should be removed by amending the clause to clarify that the “additional production” and Section VI Article 13 (8) of the policy shall only be applicable in the event of utilisation of new development activities.

“If the objective of the said clause is both to encourage additional gas production as well development of fields then if an existing infrastructure is capable of producing the extra gas and achieving the same goal within its existing infrastructure, the same may also be compensated,” proposes Sindh.

Regarding the Gas (Theft Control and Recovery) Ordinance 2013, the Sindh government proposes reduction in fines. It suggests that imprisonment up to six months and fine up to Rs100,000 or both proposed for domestic consumers be reviewed and should be between Rs10,000 and Rs25,000 considering the urban and rural consumers.