Cabinet approves Rs10 billion grant for Thar coal rail connectivity project

The federal cabinet has ratified the approval of a Rs10 billion Technical Supplementary Grant (TSG) for the Thar Coal Rail Connectivity project, providing the budgetary cover needed to utilise funds already contributed by the Government of Sindh.

BR reported that 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 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.

Under the JV Agreement, the project cost will be shared equally by the federal government and the Government of Sindh. 

The federal share will be financed through the PSDP, while Sindh will fund its portion through its Annual Development Plan (ADP).

The rail link is intended to facilitate transportation of Thar coal to independent power producers (IPPs) currently using imported coal, as well as industries including cement, fertiliser and steel, to promote greater use of indigenous fuel.

The Railways Ministry informed the Economic Coordination Committee (ECC) that Rs7 billion has been allocated for the project under the current fiscal year's PSDP. It added that the Government of Sindh has already transferred Rs 10 billion to the Federal Government Account-I.

However, the Ministry said a Technical Supplementary Grant was required to provide the budgetary cover needed to utilise the funds. It clarified that the grant would not create any additional fiscal burden on the federal government because the amount has already been provided by the Government of Sindh.

Citing the project's strategic importance, the ministry sought ECC approval for the grant, which was subsequently approved and later ratified by the federal cabinet.