Govt Approves Rs. 10 Billion Grant for Thar Coal Rail Connectivity Project

The federal government has approved a Technical Supplementary Grant (TSG) of Rs. 10 billion as budgetary cover for the Thar Coal Rail Connectivity project, a key initiative aimed at transporting indigenous coal to power plants and major industries across Pakistan.

The Ministry of Railways, in collaboration with the Government of Sindh, is implementing the project under a joint venture agreement. The rail link, previously approved by the Executive Committee of the National Economic Council (ECNEC), 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, as well as to the cement, fertilizer, and steel industries.

Under the agreement, the federal and Sindh governments will each finance 50 percent of the project cost. The federal share will be funded through the Public Sector Development Programme, while Sindh will provide its contribution through its Annual Development Plan.

The Ministry of Railways said Rs. 7 billion has been allocated under the current fiscal year’s PSDP, while Sindh has already transferred Rs. 10 billion to the federal government.

The ministry told the Economic Coordination Committee that the Technical Supplementary 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 ECC and has since been ratified by the federal cabinet.