Energy – Thar Coal Revenues Fail to Transform Sindh’s Poorest District
Energy – A gap continues to widen between promises made and the actual benefits reaching local communities in Pakistan’s Tharparkar district, despite the significant revenue generated from the Thar Coal project. Assurances given in 2019 by senior political leaders that the entire royalty income would be used for local development have yet to materialise, raising questions about accountability and governance.
Revenue Growth Outpaces Local Investment
Over the past few years, the financial gains from coal extraction in Thar have been substantial. Between 2023 and 2025, the Sindh government reportedly earned around Rs 50 billion in royalties. In addition, its majority stake in the Sindh Engro Coal Mining Company has further strengthened its financial position as a key beneficiary of the project’s success.
However, these earnings have not translated into proportional development spending within the district. Official figures indicate that the Annual Development Programme allocation for Tharparkar during the 2024–25 fiscal year stood at approximately Rs 10 billion. This amount remains considerably lower than the revenue generated from the region, highlighting a visible imbalance in resource distribution.
Persistent Poverty Despite Resource Wealth
Despite being home to one of the country’s largest coal reserves, Tharparkar continues to face severe socio-economic challenges. According to recent data, the district remains among the poorest in Pakistan, with a poverty rate nearing 77 percent.
This situation reflects a broader issue often seen in resource-rich regions, where economic gains fail to uplift local populations. While authorities have cited investments in infrastructure such as roads, healthcare facilities, and educational institutions, the overall impact on living standards appears limited.
Social Sector Spending Remains Limited
Efforts to support local communities through welfare initiatives have also been relatively modest compared to the scale of revenue generated. The Thar Foundation, which oversees social development programmes in the district, operates with an annual budget of around Rs 750 million.
Although this funding supports various initiatives, it represents only a small portion of the total value extracted from the region’s coal reserves. Observers note that such spending levels are insufficient to address the deep-rooted challenges faced by residents, including access to clean water, healthcare, and education.
Lack of Clear Policy Framework
A key issue identified in the report is the absence of a structured and legally defined system to allocate coal revenues for local development. There is currently no formal mechanism that ensures funds generated from Thar’s natural resources are directed toward the district in a transparent and consistent manner.
This institutional gap has made it difficult to track how revenues are utilised and whether they align with earlier commitments. Without a clear policy framework, the process remains largely dependent on administrative decisions rather than enforceable guidelines.
Unfulfilled Commitments Raise Concerns
The original commitment—that the wealth generated from Thar’s coal reserves would directly benefit its residents—remains largely unmet. Analysts suggest that the continued delay in establishing a transparent and accountable system reflects a deeper governance challenge.
The absence of measurable outcomes in Tharparkar has also intensified scrutiny of provincial authorities. Calls for greater transparency, better planning, and legally binding mechanisms are growing as stakeholders seek to ensure that future revenues contribute meaningfully to local development.
As the Thar Coal project continues to expand, the focus is now shifting toward whether policy reforms and stronger oversight can bridge the gap between economic potential and on-ground realities in one of Pakistan’s most underdeveloped regions.