The list of attendees that discussed the future of Oracle Power PLC’s (LON:ORCP) Thar project in the latest online Zoom meeting is impressive and stands testament to the size and scope of the project.
Alongside major Oracle and Thar backer His Highness Sheikh Ahmed Bin Dalmook Juma Al Maktoum on meeting screens were the President of China Coal (with his entire team) as well as a distinguished delegation of Pakistani dignitaries that included the Special Assistant to the Prime Minister on Power and Minerals, the Deputy Chairman of Planning, and the Managing Director of the Power and Private Infrastructure Board.
Given that the sheikh is a member of the ruling family of Dubai, the President of China Coal sits atop the second largest coal conglomeration to come out of China, and that the Pakistani government was represented at high level, it’s easy to see how seriously the Thar project is taken on all sides.
The reason? – simply, it’s scale. When one takes into account all the aspects of the proposed development- from a proposed power station to coal liquefaction, the manufacture of urea, and an industrial park - the whole investment could add up to as much as US$8bn, or more than 2% of Pakistan’s GDP.
Oracle itself, which has acted as the major progenitor of the project, played a key role in the meeting too, and chief executive Naheed Memon submitted an 80-page detailed implementation plan for the consideration of the attendees.
One key outcome is likely to be the granting of a Letter of Intent from the Pakistani government, a permission which will effectively give the Oracle consortium, of Oracle, the Sheikh and China Coal, the green light to continue. It also guarantees the government’s support in the future.
For the Sheikh and the Chinese this last point is of crucial importance, given the size of the proposed investment. According to Memon, the project that’s envisaged involves a thirty-to-fifty year commitment on the part of its backers. So it’s important to establish acceptable ground rules right at the start.
That process has been somewhat disrupted by the coronavirus, the outbreak of which has prevented the usual round of face-to-face meetings happening, including preparatory meetings that would set the stage for this one. Instead, much ground was covered in one go: the Chinese delegation was pleased to be able to indicate the level of China Coal’s commitment to Pakistan, whilst at the same time gaining familiarity with the officials that will be involved in the political decision-making process.
On the government side, there was a corresponding desire to hear the consortium’s plans to develop Thar and to understand how the consortium plans to work with the government to make it happen, including how the timelines of the two sides marry up.
That the Letter of Intent will be granted seems likely. This is one of the biggest projects in Pakistan both economically and politically, and the involvement of a key ally, China, makes it strategically important too.
But what exactly the timeline for the granting of the Letter of Intent will be from here on in remains an open question. On the Oracle side, everything is ready and all the requisite submissions have been made.
But exactly how fast the wheels of Pakistan’s bureaucracy will turn is hard to predict. All we know is that at the next meeting of the Power and Private Infrastructure Board, the Oracle consortium’s application will be on the agenda.
The Chinese side is certainly optimistic, though. At the end of the meeting the Chinese expressed a hope that meetings in person would be possible very soon. At which point, they added, it was hoped that the Letter of Intent would already be in place.