• Energy secretary concedes no formal mechanism devised yet for specific utilisation of royalties from Thar coal
• MNA Malani says PPP is prioritising transparent system to ensure local communities benefit from clean water, healthcare and education
• Opposition raises question over spending of CSR funds

MITHI: Seven years after Thar Coal began commercial operations, the Sindh government remains locked in a high-stakes stalemate over the utilisation of its royalty funds. The gridlock is compounded by a lack of transparency; the exact totals for both royalty and Corporate Social Responsibility (CSR) funds remain unverified and unclear.

Often hailed as the cornerstone of Pakistan’s energy security, the Tharparkar district sits atop an estimated 175 billion tonnes of coal reserves. PPP Chairman Bilawal Bhutto-Zardari has frequently likened this massive deposit to Saudi Arabia’s oil wealth, asserting that Thar has the potential to generate 100,000 MW of electricity for the next two centuries.

This vision was solidified in 2019 when Mr Bhutto-Zardari and Sindh Chief Minister Syed Murad Ali Shah publicly pledged that 100 per cent of coal royalties would be dedicated exclusively to the district’s development. However, years later, that promise remains uncodified.

The financial data obtained by Dawn paints a striking picture.

While billions are being pulled from the earth in Tharparkar, the local landscape remains largely awaiting its transformation.

Between 2023 and 2025, the Sindh government’s coffers were significantly bolstered by the coal project, collecting approximately Rs50bn in royalties alone in the last three years — 2023 to 2025. This wealth was split evenly between the two major players, with Block I and Block II.

But the revenue stream doesn’t stop at royalties. As a 54.7 per cent shareholder in the Sindh Engro Coal Mining Company (SECMC), the government also receives a direct 54.7pc share of the company’s profits. This makes the provincial government not just a regulator, but a primary beneficiary of the project’s commercial success.

However, a closer look at the local impact reveals a significant “development gap”. Despite the influx of tens of billions in revenue, the Annual Development Program (ADP) expenditure for the Tharparkar district was recorded at a comparatively modest Rs10bn for the 2024-25 fiscal year.

The disconnect is perhaps most visible in the social sector. The Thar Foundation — the dedicated social development arm of SECMC — operates on just Rs 750 million annually, totalling to an estimated Rs2bn in the last three years. When held up against the billions in total revenue generated by the land, this CSR contribution appears as only a tiny fraction of the wealth produced by the very region it is meant to serve.

‘No formal mechanism for funds utilisation’

The provincial administration maintains that funds are being utilised, but admissions of a “missing mechanism” persist.

Sindh Energy Secretary Shahab Qamar Ansari admitted that while royalties are deposited into the government’s account, no formal mechanism has yet been devised for their specific utilisation.

He declined to disclose the specific total of revenue generated from the district’s 15-million-ton annual production.

The SECMC has distanced itself from the spending controversy. Spokesperson Junaid Ansari clarified that while the company remains compliant by paying a 7.5pc royalty on its annual turnover, it possesses no legal mandate to “force” the government to spend those funds within Tharparkar.

Local leaders and analysts argue that the current “hands-off” stance by the state-majority-owned entity obscures the true impact of coal wealth.

“Without a structured, transparent mechanism to track these funds, there is no guarantee the wealth is reaching the district’s most marginalised communities,” says journalist Mohsin Babbar.

He argues that a formal legislative framework is now a central necessity, but with a transparent and participatory implementation strategy.

Dr Ghulam Haider Samijo, the chairman of the Tharparkar District Council, has made a formal push for the funds to be transferred directly to the local government.

“The District Council is uniquely positioned at the grassroots level to identify the community’s true needs,” he emphasised.

PPP MNA Dr Mahesh Malani, who is also a member of the SECMC and Thar Foundation boards, defended the government’s record and claimed that $750 million already invested in roads, hospitals, schools and the Mai Bakhtawar Airport.

“I can assure you that royalty from Thar’s vast coal projects will be invested in Thar’s future,” he stated. “The PPP leadership is prioritising the design of a transparent mechanism to ensure local communities benefit from clean water, healthcare and education.”

However, for people like Khatau Jani, the debate is about more than just infrastructure.

He asserts that the royalties are the “legal and moral right” of residents who remain trapped in poverty despite the riches beneath their feet. He criticised the reliance on the Thar Foundation, arguing that a corporate subsidiary lacks the legal mandate and institutional scale to manage billions in public royalties.

An official from Sino Sindh Resources (Block-I) stated that the company has contributed approximately Rs16-17bn in royalties to the Sindh government since mining operations began.

However, the official clarified that the mandate for utilising these funds, specifically for the development of Tharparkar, rests entirely with the provincial government.

On the other hand, the opposition is raising serious questions about transparency.

Arbab Ahsan, a leader of the Arbab Group in Tharparkar, alleged that the Thar Foundation has failed to deliver meaningful results, noting a total lack of transparency regarding how CSR funds are spent.

Despite Thar producing 15 million tonnes of coal and 2,640 MW of electricity annually, Mr Ahsan dismissed the government’s “free electricity” pledges as “false promises,” pointing out that local residents still endure up to 16 hours of daily power outages.

Published in Dawn, March 1st, 2026