New coal policy draft to be placed to PM with stress on PPP funding

June 23, 2009

M Azizur Rahman — Energy ministry will place a fresh draft of the coal policy to the Prime Minister incorporating public-private partnership (PPP) as a key option to raise funds for coalmine development, officials said Sunday.

“We are now working to accommodate crucial recommendations of the non-resident Bangladeshis (NRBs) into the draft,” energy secretary Mohammad Mohsin told the FE.

“After that, we will place it to the PM to expedite its adoption and subsequent action for coal sector development,” he added.

Officials said the new draft would stress local sourcing including raising money from the stock markets, welfare funds and the PPP to finance the development of the coal mines.

“Resource mobilisation from local resources for the coal sector development is the key recommendation the NRBs have put forward to Petrobangla following their four-day brainstorming session at Jamuna resort,” an official said.

The brainstorming follows urgent calls from the power-hungry businessmen who have sought a clear and quick government decision on the development of the country’s five coalmines for the sake of energy security.

Although the country is sitting on a huge coal reserve of around 2.90 billion tonnes in five mines, the government could only extract the mineral from a lone underground coalmine at Barapukuria with paltry daily production of around 3,000 tonnes.

Development of the remaining four coalmines — all blessed with top quality mineral — has been put on hold for the last one decade on the pretext of adoption of the national coal policy.

Investment proposals worth several billion US dollars are now pending with the Board of Investment (BoI) for development of the mines.

Energy secretary said although the first draft of the national coal policy came out in December 2005, the government could not finalise the strategic guidelines.

Since then it underwent several revisions by a number of committees constituted by successive governments.

A senior energy ministry official said the energy security, institution and legal framework, resource mobilisation, environment and safety, resettlement and rehabilitation would be the main thrusts of the policy.

Following their workshop in Jamuna Resort, the NRBs recommended that the government stay away from exporting coal from the country.

Coal could be exported only in case of emergency, they pointed out. The NRBs also suggested that the mining method of any coalmine should be mine specific.

Officials said the latest policy draft would propose awarding of licences for coal explorations from any coalmines through open tenders, although the existing rules say that the licences would be given on first-come-first-served basis.

Khani Bangla, an entity under the state-owned Petrobangla, would be given the responsibility to look after the development of coal and other issues relevant to country’s mines and minerals.

Setting up coal-fired power plant at the mine mouth will be made mandatory for developing any coalmine, the draft observed.

New coal policy draft to be placed to PM with stress on PPP funding

Comments