ADB to the rescue? Pakistan eyes $2 billion railway upgrade; China’s decade-long rail promise falters
The Asian Development Bank is set to finance improvements to Pakistan’s railway infrastructure, taking over from China following extended delays in securing Chinese funding that risked affecting a crucial mining venture, according to sources quoted by Reuters.The initial plan for renovating 1,800 km of railways was a key component of China’s $60 billion investment initiative in Pakistan, announced in 2015 as part of the Belt and Road Initiative. However, after ten years of discussions, the railway upgrade financing remains unresolved, whilst Pakistan faces challenges in repaying existing Chinese project debts.Sources familiar with the matter told Reuters that the ADB is finalising arrangements to spearhead a $2 billion upgrade of a 500-km railway section from Karachi to Rohri. This development has become crucial for transporting copper ore from the Reko Diq mine, currently under development by Canada’s Barrick Mining Corp.“We will have a crisis. How will you evacuate output from Reko Diq? The exhausted line will come under even more pressure,” stated a senior government official. Pakistan’s railways ministry offered no immediate response, while China’s foreign ministry affirmed, “China and Pakistan are iron friends and all-weather strategic partners.”The ADB declined to confirm the financing arrangement but acknowledged ongoing discussions with Pakistan regarding railway sector development. The agreement, anticipated to be announced this month, involves the ADB leading a consortium and selecting an international engineering contractor through competitive bidding.The diplomatic considerations have been addressed with China, according to sources. The China-Pakistan Economic Corridor has seen reduced momentum, with the last significant project completed in 2022. Pakistan faces challenges with payments for Chinese-built power stations and seeks debt restructuring.The Reko Diq copper and gold mine, crucial to Pakistan’s mining sector development, aims to commence production in 2028, yielding approximately 200,000 metric tonnes of copper concentrate annually. The ADB-backed railway upgrade will enhance the track system for faster diesel train operations between Karachi and Rohri.The project faces additional challenges, including security concerns in Balochistan province, where militant activities frequently target railway infrastructure. Tim Cribb, Reko Diq’s project director, confirmed collaborative efforts between the government and Barrick regarding financing for the western railway branch to Rohri.
