Key Takeaways
- The federal government has approved a Technical Supplementary Grant of Rs. 10 billion for the Thar Coal Rail Connectivity project.
- The project aims to transport indigenous coal from Thar fields to power plants and industries across Pakistan.
- Both federal and Sindh governments will finance 50 percent of the project cost.
The federal government has approved a Technical Supplementary Grant (TSG) of Rs. 10 billion for the Thar Coal Rail Connectivity project, a key initiative aimed at transporting indigenous coal to power plants and major industries across Pakistan.
Implemented in collaboration with the Government of Sindh under a joint venture agreement, the rail link will connect the Thar coalfields to Pakistan’s existing railway network, including last mile connectivity to Port Qasim. The project is intended to improve the utilization of Thar’s coal reserves by supplying locally mined coal to independent power producers currently using imported coal.
Under the agreement, both federal and Sindh governments will finance 50 percent of the project cost. The federal share will be funded through the Public Sector Development Programme (PSDP), while Sindh will provide its contribution through its Annual Development Plan. According to the Ministry of Railways, Rs. 7 billion has been allocated under the current fiscal year’s PSDP.
The Ministry of Railways informed the Economic Coordination Committee that the grant was required only as a budgetary mechanism to utilize Sindh’s contribution and would not create any additional fiscal burden on the federal government. The grant was approved by the Executive Committee of the National Economic Council (ECNEC) and subsequently ratified by the federal cabinet.
The project is expected to enhance Pakistan's energy security by reducing reliance on imported coal, while also supporting local industries such as cement, fertilizer, and steel that can benefit from locally sourced coal. The rail link will facilitate the transportation of coal to these industries, thereby improving their operational efficiency and competitiveness.
The approval of this grant marks a significant step towards realizing the potential of Thar’s vast coal reserves, which are estimated at over 170 billion tonnes. By connecting these reserves to the national railway network, the project aims to unlock economic benefits for both Sindh and other regions of Pakistan.
