An Untapped Resource

Is the federal government doing enough to help Sindh develop the Thar coal reserves?

By Shahid Shah

Commenting on the federal government's decision to take control of the Sindh Coal Authority, Nazar Hussain, a former political activist, says the Centre has no interest in taking care of the federating units. The federal government, he adds, repealed a notification of handing over the Inter-Services Intelligence (ISI) to the Interior Ministry, showing its inability to act against the premier spy agency, but it can easily swallow up the provincial resources.

The federal government, through a notification from the Prime Minister's Secretariat on July 8, took control of the Sindh Coal Authority from the provincial government. The authority was established under the Sindh Coal Authority Act, 1993, and was governed through a board headed by the Sindh minister for Mines and Minerals. The federal government also abolished the Thar Coal Mining Company, a joint venture of the federal and Sindh governments.

Following in the footsteps of the previous government, which took control of two of Sindh's islands -- Buddo (Dingi) and Bundal (Bhundhaar) -- and signed a controversial contract with a United Arab Emirates (UAE) firm to develop them, this is the first blow to the provincial autonomy by the current federal government.

Sindh has almost 98 percent coal reserves of the country. Of the 185 billion tonnes of coal deposits in the province, more than 175 billion tonnes are in Thar alone. Sindh coal is ranked lignite, which is used for power generation around the world. The Thar coal deposits are sufficient to cater to the country's fuel requirements for centuries and can generate more than 100,000-megawatt electricity.

Though Pakistan's power generation from coal has been reduced to less than one percent from more than 30 percent at the time of the subcontinent's partition, the natural resource is still used as the main fuel for power generation in the United States, Germany, China, India, South Africa and Australia. Coal provides more than 23 percent of the global primary energy needs and generates nearly 39 percent of the world's electricity.

The federal government's decision to develop a 'one window' department on Thar coal is being seen as an attempt to undermine provincial resources, because direct foreign investment has been invited for the project. The Prime Minister's Secretariat's notification says the federal government will technically empower the provincial government on coal development and power generation. Provincial officials, however, believe that the decision is aimed at swallowing up the big chunk of investment that is likely to land in future.

The Sindh government recently received investment offers of $2.5 billion from reputed national and international agencies in response to an invitation for expression of interest, issued by the Sindh Mines and Minerals Department. The Thar coal project has the potential to generate 1,000-megwatt electricity. According to Engineer Naseer Memon, the mining capacity can be increased from six million tonnes to 30 million tonnes annually to generate 5,000-megwatt electricity. This alone ensures that the project will draw attention of the investors.

This thinking gets support from the proposed formation of the Thar Coal Authority. The authority will comprise seven members, four of whom will be from the federal government. Sindh will nominate a professional or a technocrat as the authority's chairperson and one of its ministers as a member, while the vice-chairman of the authority will be the federal minister for Water and Power. The deputy chairman of the Planning Commission and secretary Ministry of Water and Power will also be members of the Thar Coal Authority.

Sindh government officials believe that with exception of two members to be chosen by the provincial government, the remaining five members will be 'imposed' by the federal government and they will dominate the decisions of the authority. Sindh is not the only province that has reservations about the federal government taking control of its resources. Balochistan is also a major victim. The late Nawab Akbar Khan Bugti lost his life demanding a fair royalty for the Balochs from the Sui gas fields.

Analysts also view that the notification of the federal government had no legal authority. There are two legislative lists under the 1973 Constitution: Federal Legislative List and the Concurrent List. Items not mentioned in the two lists are considered as provincial subjects. Not mentioned in any of the lists, coal remains a provincial subject too. The aforementioned notification, therefore, is constitutionally invalid, Memon observes.

On the other hand, the Sindh Cabinet convened an emergency meeting and established the Sindh Coal Board with the province's chief minister as its head. The Cabinet demanded that the control over the Thar coal reserves should remain with the provincial government. The federal government's decision has provided the nationalist forces of the smaller provinces, who usually blame Punjab for usurping their rights, with another issue. This will prove to be another setback to the inter-provincial trust, views one analyst.

Sindhi politicians, writers and intellectuals have demanded that the control over the authority and coal royalty should remain with the province; otherwise, it would increase the feeling of deprivation among the inhabitants of the province. There have already been many protest demonstrations against the federal government's decision.

Addressing the government of Pakistan, members of the National Assembly and the Senate of Pakistan, as well as all the citizens of the world, Sindhi politicians and writers demanded through an online petition that the recent announcement by the Government of Pakistan to establish an Islamabad-based Sindh Coal Authority be retracted immediately. They believed that the rightful owners of the vast coal deposits in the Thar region were the people of the province and the recent action of the federal governments was illegal and unconstitutional.

The head office of the authority should continue to be based in Karachi and the majority of members should be appointed by the Sindh government. "The proposed composition of the authority, that four out of its five members will be federal government appointees, is totally unacceptable," said the petition. The petitioners called the federal government's action a serious violation of the Constitution of Pakistan and an attempt to secure control over the provincially-owned natural resources.

If the provincial government surrenders to the pressure of the federal government, they warned, the people of Sindh will oppose any decision taken that do not protect Sindhi interests by holding public demonstrations and conducting hunger strikes. The international companies must realise the immense risk they would be taking by engaging with a federally appointed agency, because the formation of such an authority might be declared illegal by the courts in future.

Dr Ali Akbar M Dhakan, a local writer, says the federal Cabinet's decision of setting up the Thar Coal Authority, after abolishing the Sindh Coal Authority, is a blow to the provincial autonomy. He adds that the federal government and the Water and Power Development Authority (Wapda) are not serious in the development of the Thar coal deposits. "The treatment meted out by the federal government to Shenhua Group Corporation, a Chinese company, forced the latter to roll back its $1.5 billion investment plan after it had already shipped heavy machinery for drilling coal in Thar," he alleges.

Courtesy: The News Pakistan