KARACHI : The World Bank may continue its support for the multi-billion dollars project, Thar coal project, to help resolve the worst ever energy crisis in the country, it is learnt. The Bank had recently withdrawn its strong support for Thar Coal, citing many reasons behind it, such as lack of emphasis, trust deficit among local people of the district Tharparkar, etc.

However, the reservations shown by the World Bank are being worked out, official sources in Sindh government told Business Recorder on Saturday. The Advisor to Prime Minister on Finance, Dr Abdul Hafeez Shaikh, had held talks with the Bank representatives a few days back and persuaded them to support the multi-billion dollars Thar coal project, which could take the country out of the present electricity crisis, they said.

Initially, the World Bank would be allotted Block No 1 of the Thar Coal, and agreements in this respect would soon be finalised, sources said, adding that the Bank had recently forwarded a letter to the Economic Affairs Division for preparation of advance agreement for proposed Thar Coal and Power Technical Assistance Project by May 31, 2010.

Sources said that the federal government had signed an agreement with the World Bank on December 24, 2009, and added that the refinancing date for this Project Preparation Advance (PPA) was May 31, 2010. "As you know, the refinancing you date for this PPA is May 31, 2010. This is to advise you that, in accordance with the current practice of the Bank, disbursement from this PPA following that date may be made during a grace period of three months.

"Such disbursements will, however, only be made in respect of eligible expenditures incurred prior to the refinancing date (ie payment made or due for goods, works and services that have been provided prior to the refinancing date. "Any proceeds of the PPA remaining un-withdrawn after disbursements have been made in respect of such withdrawal applications will be cancelled", sources said while quoting from the text of the Bank's letter.

After the Bank had shown reservations over resettlement issue of the local population of Tharparkar district, sources said, the Sindh government was conducting a detailed plan regarding resettlement and compensating the affected persons of the coal mines area with a cost of Rs 200 million.

To accomplish the process, a new agency--Coalfield Empowerment and Resettlement Agency (CERA)--would be established, with the appointment of a full-time Director, and it would work under the Sindh Coal Authority. The agency would liaise with the local government bodies to ensure that the requisite infrastructure and services are provided in proposed resettlement areas and the people are given due basic facilities and employment opportunities, sources added.