$390 Million Reko Diq Bridge Loan to Fund ML-3

Pakistan Railways’ grand plan to revive the 996-kilometre Main Line-3 (ML-3), a rusting relic connecting Rohri to the Iranian border at Koh-i-Taftan via Sibi and Quetta, has hit a bureaucratic speed bump, with the Planning Commission slamming the brakes on key aspects of the project’s financing and security arrangements.

The total price tag sits at Rs. 278.62 billion, but here is the twist: instead of traditional PSDP funding, the government has opted for a $390 million (over Rs. 112 billion) bridge loan from the very company that needs the railway, the Reko Diq Mining Company (RDMC). And it comes with a ticking clock: repay it all, in one lump sum, by June 2028, reported Dawn.

The Planning Commission, in its review ahead of the CDWP meeting chaired by Planning Minister Ahsan Iqbal, did not mince words. The bullet repayment structure, it warned, “could create significant fiscal pressure and repayment risks” for a federal government already walking a fiscal tightrope.

A staggering Rs. 46.38 billion, nearly 17 per cent of the entire project cost, has been earmarked for keeping the workers and tracks safe during construction.

The Commission was unimpressed. “Provision of security is not a development activity,” it noted dryly, questioning whether anyone had even bothered to ask the Balochistan government if its local police might lend a hand. It also wanted to know who, exactly, would guard the corridor once the contractors pack up and leave, a question made all the more urgent by recent militant attacks along the route.

Despite a seven-year execution timeline, only Rs. 25.87 billion, a meagre 9 percent of the total, has been pencilled in for the first year.

The existing track is a museum piece, with trains crawling along at 10 to 15 kilometres per hour. Passenger traffic on the Quetta-Taftan section has all but vanished; the few remaining trains take a punishing 48 hours to complete a journey that a truck covers in 15. Freight services are a ghost of what they could be, one or two trains a month, when the Reko Diq mine alone is expected to demand eight train sets monthly, with more connecting to Iran and beyond.

The line capacity leaping from two train pairs to 26, speeds hitting 100 km/h, and a direct mineral corridor from Nokundi to Gwadar Port that would slash export times. The route also doubles as a strategic artery linking Pakistan to Iran, Turkiye, and ultimately the markets of Europe and Central Asia.

The project has already begun moving. A joint venture led by M/s Zeeruk International has been appointed as consultant, and RDMC has agreed to help procure critical machinery. The prime minister has signed off on the bridge financing, and the ECC has cleared the related agreements. Phase I (2026-2030) will consume $585 million for critical infrastructure, with Phase-II (2031-2033) mopping up the remaining $145 million.

But the Planning Commission’s questions linger. Can a project whose financial viability is already under strain afford to carry security costs that belong on someone else’s books? Will the bridge loan become a bridge to nowhere if PSDP allocations fail to keep pace? And in a province where the security situation can shift overnight, what happens after the last contractor’s truck departs?