ISLAMABAD: The government has approved a Technical Supplementary Grant (TSG) of Rs10 billion as budgetary cover for the Thar Coal Rail Connectivity project, aimed at facilitating transportation of indigenous coal to power plants and industrial consumers.
The Ministry of Railways (MoR), in coordination with the Government of Sindh, is executing the project under a Memorandum of Understanding (MoU) followed by a Joint Venture (JV) Agreement between the two parties.
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According to the MoR, the Executive Committee of the National Economic Council (ECNEC) had already approved the PSDP project titled “Thar Coal Rail Connectivity with the existing railway network including last-mile connectivity with Port Qasim.” The project is designed to ensure efficient utilisation of Thar’s vast coal reserves by enabling supply not only to independent power producers (IPPs) currently operating on imported coal but also to key industries such as cement, fertiliser, and steel across the country.
Under the JV Agreement, the project cost is to be shared equally by the federal government and the Government of Sindh. The federal share will be financed through the Public Sector Development Programme (PSDP), while Sindh will contribute its portion through its Annual Development Plan (ADP) on a matching and timely basis to avoid delays, cost overruns, and contractor claims.
The MoR informed the Economic Coordination Committee (ECC) that Rs7 billion had been allocated in the PSDP for the current fiscal year. In addition, the Government of Sindh has already transferred Rs10 billion to the Federal Government Account-I for the project.
However, the Ministry explained that a Technical Supplementary Grant was required as a budgetary cover to utilise these funds. It clarified that the Rs10 billion TSG does not impose any additional fiscal burden on the federal government, as the amount has already been provided by the Government of Sindh.
Citing the strategic importance and urgency of the project, the Ministry of Railways sought ECC’s approval for the grant, which was subsequently approved. The decision has also been ratified by the federal cabinet.
Copyright Business Recorder, 2026
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