Pakistan to fund major railway projects in upcoming budget, PM says

Prime Minister Shehbaz Sharif has announced that Pakistan will secure funding for major railway modernization projects in the upcoming federal budget. This commitment is part of a strategic effort to revitalize the nation’s aging rail infrastructure, strengthen trade logistics, and improve freight transportation.

Strategic Economic Reforms

The push for infrastructure upgrades aligns with a broader reform agenda supported by a $7 billion International Monetary Fund (IMF) program. By prioritizing the railway sector, the government intends to support economic growth and boost exports.

Successive administrations have viewed the railway network as a vital tool for reducing logistics costs. Improving this connectivity is expected to ease the current pressure on the country’s road network.

Did You Know? Much of Pakistan’s railway network dates back to the British colonial era and has faced decades of financial losses and operational inefficiencies due to underinvestment.

Prioritizing Freight and Revenue

Prime Minister Sharif has directed authorities to prioritize investment in freight services over passenger services, as cargo transport generates higher revenues. He noted that world-class freight services could facilitate the movement of industrial goods and significantly increase annual earnings for Pakistan Railways.

Recent reforms in freight operations have already shown results. Officials expect to generate a historic revenue of up to Rs40 billion ($144 million) by June of this year.

Expert Insight: Samantha Carter notes that the shift toward freight-centric investment represents a pragmatic move to turn a loss-making legacy system into a revenue-generating asset. By linking ports to industrial centres, the government is attempting to solve a critical bottleneck in the national supply chain.

Key Infrastructure Projects

The government is focusing on several “mega projects” to accelerate modernization. These include the ML-3 railway corridor and the Thar Coal Rail Connectivity Project.

A central piece of this plan is the ML-1 project, which involves upgrading the main north-south railway line connecting Karachi with Peshawar. While associated with the China-Pakistan Economic Corridor (CPEC), this project has experienced repeated delays in financing and implementation.

Next Steps and Implementation

The federal budget for the 2026-27 fiscal year is scheduled for presentation on June 10. Following this, budget allocations for these railway projects are expected to be finalized.

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To prevent cost overruns and delays, the Prime Minister has ordered ministries to secure administrative and financial approvals in advance. Such measures may help reduce construction costs and could improve the overall efficiency of public investment.

Frequently Asked Questions

When will the federal budget be presented?

The federal budget for fiscal year 2026-27 is scheduled to be presented on June 10.

What is the ML-1 project?

ML-1 is the centerpiece of the rail modernization plan, focusing on upgrading the main north-south railway line that links Karachi with Peshawar.

Why is the government prioritizing freight services?

Freight services are being prioritized because they generate higher revenues than passenger services and can facilitate the transportation of industrial products.

Do you believe prioritizing freight over passenger rail is the most effective way to revive a national railway system?