Pakistan has again delayed approval of the $1 billion Main Line-3 (ML-3) railway rehabilitation project, marking the third postponement in five months amid financing issues and a possible change in the route for transporting minerals from Reko Diq. The Central Development Working Party (CDWP) deferred the Rs. 278 billion project again this month.
The scheme involves upgrading the ML-3 railway track between Nokhandi and Rohri to support large-scale mineral transportation from Reko Diq, the giant copper and gold deposit in Balochistan’s Chagai district. For now, the railway is in no condition to carry them, and the money to fix it is not yet in place.
ML-3 Track Needs Major Rehabilitation
The project covers around 996 kilometres of railway infrastructure. The existing track has exceeded its operational life, while trains currently travel at an average speed of only around 30 kilometres per hour. Authorities consider complete rehabilitation necessary before the route can safely handle heavy mineral cargo from Reko Diq.
$390 Million Bridge Loan Under Review
Planning Minister Ahsan Iqbal said officials delayed the project because they need further details on the proposed bridge-financing arrangement with Reko Diq Mining Company. The government has already approved a $390 million bridge loan from the mining company to help finance the railway upgrade. The financing carries an estimated annual interest rate of around 6 percent. The government is expected to repay the amount through a single bullet payment by June 2028. At the agreed financing rate, officials estimate the total repayment could reach nearly $450 million.
However, questions have emerged over whether the financing arrangement will survive if Pakistan decides to ship Reko Diq minerals through Gwadar Port instead of Karachi Port. Officials said a change in the export route could require a fresh commitment from the mining company on whether it would continue providing the loan.
Gwadar Route Under Consideration
Under the original plan, Reko Diq minerals would move through the Nokhandi-Quetta-Rohri railway corridor before reaching Karachi. However, authorities are now considering Gwadar as an alternative export point. Such a shift would require the Nokhandi-Panjgur-Gwadar road connection to become fully operational. Executives from Barrick Gold, Ivanhoe Atlantic and Minmetals participated in the Pakistan Minerals Investment Forum this week. A Barrick delegation also met Ahsan Iqbal, who called for accelerated work on the Nokundi-Gwadar road corridor and proposed a joint working group of the Planning Ministry, National Highway Authority, Balochistan government and mining companies to address the technical, feasibility and financing questions.
Project Has Already Faced Multiple Delays
The CDWP previously considered the ML-3 project in June and August. During an earlier review, officials asked the Ministry of Railways to provide a complete picture of its funding needs for the next five years, covering its own resources, PSDP funds and arrangements outside the PSDP. The Planning Ministry had earlier given the Rs. 278.62 billion scheme in-principle approval. The project includes track renewal, rehabilitation of bridges and embankments, replacement of turnouts and construction of 11 new railway stations between Spezand and Taftan.
Rail Route Also Connects Pakistan With Iran and Turkiye
The Quetta-Taftan section forms part of Pakistan’s transport corridor with Iran and Turkiye, carrying passenger and freight traffic toward both countries. However, the poor condition of the track has sharply reduced railway operations, and currently only one or two freight trains per month operate between Quetta and Taftan. Authorities hope the corridor could eventually handle up to eight sets of freight trains, in addition to other cargo services toward Iran and other countries.
Planning Commission Raises Funding Concerns
During scrutiny of the project, the Planning Commission also noted that the project documents did not clearly explain the level of consultation and coordination undertaken with Reko Diq Mining Company. Only Rs. 250 million has been allocated to the project during the current fiscal year, a tiny fraction of the Rs. 278 billion total cost, and the commission warned that failure to secure adequate financing could cause further delays and sharply increase the project’s eventual cost. Ahsan Iqbal also questioned how Pakistan Railways planned to finance the scheme and directed the Railways Ministry to prepare a consolidated five-year funding plan covering ML-3, ML-2 and ML-1.
Government Also Struggling to Fund ML-1
The ML-3 financing challenge comes as the government continues to search for funds for the much larger ML-1 Karachi-Peshawar railway project. Authorities are considering several financing options, including a possible Asian Development Bank loan, a lease model led by the Frontier Works Organisation, and using Pakistan Railways land as collateral to secure financing from domestic commercial banks. At the Pakistan Minerals Investment Forum, Prime Minister Shehbaz Sharif and Chief of Defence Forces Field Marshal Syed Asim Munir stressed the importance of exporting finished mineral products instead of relying only on exports of raw materials.
The message was clear: Pakistan wants the wealth beneath its soil to be processed at home, not simply dug up and shipped away. Its minerals cannot earn anything until they can reach a port. Until the government settles the financing and the route, the ML-3 upgrade will remain a plan on paper.
