Pakistan Again Defers $1 Billion ML-3 Railway Project Over Financing and Route Concerns

Pakistan has once again delayed approval of the $1 billion Main Line-3 (ML-3) railway rehabilitation project, marking the third postponement in five months. The Central Development Working Party (CDWP) deferred the Rs. 278 billion scheme this month, citing unresolved financing details and a possible change in the route for transporting minerals from the Reko Diq copper and gold project.

The project involves upgrading approximately 996 kilometres of railway track between Nokhandi and Rohri. The existing infrastructure has exceeded its operational life, with trains currently limited to an average speed of around 30 kilometres per hour. A full rehabilitation is considered essential before the route can safely handle heavy mineral cargo.

Planning Minister Ahsan Iqbal said the delay was necessary to obtain further details on the proposed bridge-financing arrangement with the Reko Diq Mining Company. The government has already approved a $390 million bridge loan from the company, carrying an estimated annual interest rate of around 6%. The loan is to be repaid through a single bullet payment by June 2028, with total repayment estimated at nearly $450 million.

However, questions have emerged over whether the financing arrangement will remain unchanged if Pakistan decides to ship Reko Diq minerals through Gwadar Port instead of Karachi Port. Officials noted that a change in the export route could require a fresh commitment from the mining company on whether it would continue providing the loan.

Under the original plan, Reko Diq minerals would move through the Nokhandi-Quetta-Rohri railway corridor before reaching Karachi. Authorities are now considering Gwadar as an alternative export point, which would require the Nokhandi-Panjgur-Gwadar road connection to become fully operational.

The development comes as Pakistan increases its focus on the mining sector, with the Reko Diq project seen as a key source of foreign investment and export revenue. The repeated delays, however, raise concerns about the timeline for critical infrastructure needed to support these ambitions.