Pakistan Plans Rs. 278.6 Billion Upgrade of ML-3 for Reko Diq Transport

The federal government plans to spend Rs. 278.6 billion to upgrade nearly 1,000 kilometers of Pakistan Railways’ Main Line-3 (ML-3) to support the transportation of minerals from the Reko Diq mining project in Balochistan.

According to project documents, the 996-kilometer railway upgrade from Rohri to Koh-e-Taftan is expected to be completed by 2033. The project will be financed through bridge financing provided by Reko Diq Mining Company (RDMC), along with funding from the federal government’s Public Sector Development Program (PSDP).

The government will be required to repay the $390 million bridge financing through a lump-sum payment by June 2028, with the Ministry of Finance responsible for arranging the funds.

The project will be implemented in two phases across four packages. It includes the renewal of more than 830 kilometers of railway track, reconstruction of key sections, construction of 11 new railway stations, and upgrades to bridges, embankments, and communication systems.

According to the project’s PC-I, the railway upgrade is considered the only sustainable solution for transporting minerals from the multibillion-dollar Reko Diq project under the agreement signed between the Government of Pakistan and Barrick Gold/RDMC.

The Planning Commission said the project is expected to reduce derailments, improve train speeds, increase line capacity, shorten transportation times, and improve fuel efficiency.

However, the commission also raised concerns over the project’s financial viability, noting that no comprehensive cost-benefit analysis, freight revenue projections, tariff framework, or revenue-sharing arrangement with RDMC has been provided.

It also warned that the project’s Rs. 46.38 billion security cost accounts for about 17 percent of the total cost and that relying heavily on Reko Diq as the primary freight customer creates concentration risk. In addition, the project documents do not allocate funding for long-term operation and maintenance after completion.