ISLAMABAD: The federal government has approved a Technical Supplementary Grant (TSG) of Rs10 billion as budgetary cover for the Thar Coal Rail Connectivity Project, a key initiative aimed at transporting indigenous Thar coal to power plants and major industrial consumers across Pakistan.
The project is being implemented by the Ministry of Railways (MoR) in collaboration with the Government of Sindh under a Memorandum of Understanding (MoU) and a Joint Venture (JV) Agreement. It was previously approved by the Executive Committee of the National Economic Council (ECNEC) under the Public Sector Development Programme (PSDP).
The rail link will connect Thar’s coalfields with the existing railway network, including last-mile connectivity to Port Qasim, enabling the efficient movement of local coal to independent power producers (IPPs) currently using imported coal, as well as to the cement, fertiliser and steel industries.
Under the JV Agreement, the project cost will be shared equally by the federal and Sindh governments. The federal share will be financed through the PSDP, while Sindh will fund its portion through its Annual Development Plan (ADP) to ensure timely execution and prevent delays or cost overruns.
The Ministry of Railways informed the Economic Coordination Committee (ECC) that Rs7 billion had already been allocated under the PSDP for the current fiscal year, while the Government of Sindh has transferred Rs10 billion to the Federal Government Account-I for the project.
The ministry explained that the Technical Supplementary Grant was required solely as a budgetary mechanism to utilise Sindh’s transferred funds and would not create any additional fiscal burden on the federal government.
Recognising the strategic importance of the project in enhancing energy security and reducing reliance on imported coal, the ECC approved the Rs10 billion TSG, a decision that has since been ratified by the federal cabinet.
Story by Mushtaq Ghumman
