Railways to begin work on Thar coal connectivity project

KARACHI: Pakistan Railways will commence work on the key Thar coal railway connectivity project after securing approval from the Sindh government, which is working on the project’s cost-benefit study, sources privy to the matter said.

Although the Executive Committee of the National Economic Council Cabinet Division (ECNEC) had approved this project in December last year, the project failed to gather the necessary pace in the last eight months. A key meeting on the project will be held next week to finalize the formalities for speeding up work, said authorities associated with the project. The 105-kilometre track will connect the Thar coal mines to the existing railway network New Chhor Station, while an 18-kilometre double-track line will be built between Bin Qasim and Port Qasim.

The proposed railway network has the capacity of transporting 10 MTPA of coal, helping Pakistan shift its power generation from imported to domestic coal and reduce reliance on costly fuel imports. Analysts estimate that the project could save the national exchequer from importing fuel amounting to $1.5 billion annually.The Thar coal railway connectivity project is part of the government’s efforts to convert coal-based power plants from imported coal to Thar coal. But Thar coal’s transportation is a big issue as it is located far away from the national railway track.

The government is desperately working to cut electricity prices, which have skyrocketed in recent years, triggering a public backlash. Imported coal is the main reason for soaring electricity prices in the country, and the government wants to convert the existing imported coal projects into Thar coal, which is an indigenous cheap fuel for electricity generation.

In his recent visit to China, the finance minister, who was accompanied by the power minister, had a discussion with Chinese authorities on the conversion plan developed under the China Pakistan Economic Corridor (CPEC).

“The government wants to go ahead with the conversion plan, however, it will not be possible without the Thar coal railway connectivity project,” sources in the government privy to the matter said. “The transportation of coal through a railway network is a feasible option,” adding that transportation by trucks is not ideal.

When railways authorities were asked about the project’s status, they said that they are waiting for the approval of the concept paper, which is with the Sindh government.

“The acceptance letter has already been issued to the FWO, which has won the tender for the project, and the groundbreaking ceremony will be held once the Sindh government okayed the project,” they said. Officials from the Sindh government said that the provincial government has allocated Rs5 billion for the project in the provincial budget for this financial year (FY25), which, they say, shows that the provincial government is working on the project.

Tariq Ali Shah, managing director of the Thar Coal Energy Board (TCEB), said that the provincial government is working on the project at a fast pace, and it is expected that the project’s groundbreaking will be done soon. He confirmed the meeting on Monday to finalize matters related to the project.

Tariq pointed out that the project’s total cost is Rs58 billion, which would be shared between the federal and Sindh governments equally. While he verified the Sindh government’s allocation for the project, he expressed his inability to confirm the amount the federal government has so far contributed to the project.