Brief History

The coal mining in Surghar Range was started during 1913 by driving inclines from outcrop of the coal seam. After formation of Pakistan it was declared as an evacuee property and ultimately assumed by the Federal Government in 1949. The mines were transferred to Pakistan Industrial Development Corporation (PIDC) in 1954.

PIDC undertook a major development programme with USAID funding, and the services of foreign experts were acquired for the development of coal mines at greater depth. A scheme costing Rs. 16.7 million was executed between 1956 to 1965 for this purpose. This scheme was targeted to increase the annual production capacity to 300, 000 tons per annum. The proposed target could not be achieved due to major geological disturbance/fault known as main Makerwal. A maximum production of 218, 000 tons was achieved in 1967-68.

MCL was transferred to PMDC in 1974. PMDC initiated a major investment programme to replace the old worn out machinery. An expenditure of Rs. 24, 308 millions was made develop drivage into coal seam. In 1995 the MCL was privatized by the Privatization Commission of Pakistan.

At the time of privatization of Makerwal Collieries Limited the proved reserves of coal were negligible and such no future planning could be done unless and un till the geological investigations are carried out to establish the coal services and wages were arranged either from loan or sale of project assets. The deep sealed reserves below water level, lack of proved reserves over employment at the project was the main hurdles in the way of efficient operation of the project.

The company had not been profitable for the last ten years. PMDC had been providing financial assistance since 1983 and as of late, the Privatization Commission was paying employees salaries. Due to recurring losses and insolvency the compnay was not a GOOD CONCERN. The project was not financially viable under the present status.

Keeping in view the heavy losses the government decided to privatize the Makerwal Collieries Limited which was not viable in any circumstances except a huge investment alongwith technical expertise. This has been proved true that the present management being the very much in the mining business since long, we acquainted with the local politics, financially very sound - could hardly make the project at break even after five years - though they have raised the production to 8 times.

It is pertinent to mention here the peculairnation of the Project and its present status, it was challenging task for the buyers to purchase such a project which had under gone colossal losses, and due to its location on the boundary of two Provinces. It is due of Dakotas and absconders. In these circumstances work in the area and make investwas a difficult tasks in such area. The project was having labor Union of very bad repute.

A pre-bid conference was held by the Privatization Commission at Holiday Inn Islamabad on 31.01.1995 to provide first-hand information regarding the bidding process and to respond to queries of the prospective bidders. It was informated that the VSS /GSS will be around 51 millions which at the time of actual auction held on 08.02.1995 was raised to 206 million alongwith other dues i.e. normal gratuity etc. all participent were stunned because they were not mentally prepared for this heavy amount. We also gave our offer half-heartedly alongwith other participants. We the Modren Mining Corporation were declared successful bidders in the said open auction.

Apart from the bidding price i.e. Rs.5, 000 million of 90% shares were admitted the payment of following liabilites as per cluase 6 & 9 of the Sale Agreement dated 13.06.1995.

  1. Current Liabilities = 13, 000 million - Almost paid
  2. 50% shares of VSS/GSS=75.173 million - Paid through Escrow A/C alongwith Privatization Commission.
  3. Retirement benefits of employees = 42.319 million - Paid through the legal dues.

All the above amounts have been paid through cheques, VSS/GSS were paid through Escrow Account alongwith representative of Privatization Commission.

Since the takeover of Project in Juy 1995, we have made tremendous efforts for the development of the are/mines in order to raise the coal production and by the Grace of Almighty Allah we are continuously succeeding to achieve required target of increasing the production and maintenance of mines/project up to the standard level as specified by the government departments.