Govt approves PKR 10bn TSG for Thar coal transportation

The federal government has approved a Technical Supplementary Grant (TSG) of PKR 10 billion to provide budgetary support for the Thar Coal Rail Connectivity Project, which aims to improve the transportation of indigenous Thar coal to power plants and 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 subsequent Joint Venture (JV) Agreement.

 

According to the Ministry of Railways, the Executive Committee of the National Economic Council (ECNEC) has already approved the Public Sector Development Programme (PSDP) project titled "Thar Coal Rail Connectivity with the Existing Railway Network Including Last-Mile Connectivity with Port Qasim."

 

The rail link is intended to facilitate the efficient utilization of Thar's vast coal reserves by supplying locally mined coal to independent power producers (IPPs) currently using imported coal, as well as to major industries including cement, fertilizer, and steel.

 

Under the joint venture agreement, the project cost will be shared equally between the federal government and the Government of Sindh. The federal government's share will be financed through the Public Sector Development Programme (PSDP), while Sindh will fund its portion through its Annual Development Programme (ADP) to ensure timely implementation and avoid project delays, cost overruns, and contractor claims.

 

The Ministry of Railways informed the Economic Coordination Committee (ECC) that PKR 7 billion had already been allocated under the PSDP for the current fiscal year. It also noted that the Government of Sindh had transferred PKR 10 billion to the Federal Government Account-I for the project.

 

However, the ministry explained that the approved Technical Supplementary Grant was required solely as a budgetary mechanism to enable the utilization of the transferred funds. It clarified that the grant does not create any additional fiscal burden on the federal government since the funds have already been provided by the Government of Sindh.

 

Recognizing the strategic importance of the project and the need for timely execution, the Ministry of Railways requested the ECC to approve the PKR 10 billion TSG. The committee approved the proposal, and the decision has subsequently been endorsed by the federal cabinet.