In this paper a theoretical relationship for the effective thermal conductivity of a multiphase transversely isotropic composite system is obtained. The Generalized Self-Consistent Method and simple energy balance principle is employed to derive a more appropriate model. In the derivation, it is assumed that the orientation of fiber within the transversely isotropic composite system is unidirectional and surrounded by two different phases of porous and matrix phase. A combined effect of these three different phases on the effective thermal conductivity of the composite system in transverse direction is studied. The effect of the interfacial contact conductance between the fibers and porous medium is also considered. Results of effective thermal conductivity are plotted against volume fraction and conductance which shows extremely good agreement.