Pakistan to Sign Railway Deal for Reko Diq Project

Pakistan is set to sign a major railway agreement on October 2 as part of the $10 billion Reko Diq mining project. The deal involves laying a 1,350-kilometre railway track to transport minerals from Balochistan to Karachi. Senior officials from the Ministry of Railways will travel to the UK for the signing. This marks a significant step in the project’s development. The railway will support mineral exports and improve logistics.

The Economic Coordination Committee (ECC) has approved bridge financing of $390 million for the railway. The Reko Diq Mining Company will provide this amount under a formal agreement. This financing will help build the long-distance railway track linking the mining site to Karachi. Investors will also gain access to the network for train operations. This step is expected to attract further investment and boost trade.

Unlike past projects, the Railway Board — not the federal government — will manage the railway development. All fees, charges, and revenue-sharing models will be approved by the Railway Board. This shift in control aims to improve project efficiency. Legislation is being used to implement this new governance structure. It represents a key change in how major infrastructure projects are overseen.

The cost of Phase I of the Reko Diq project has now increased to $7.72 billion. This is up from earlier estimates of $6.8 billion, and far higher than the original $4.3 billion projection. Phase II is expected to cost $3.3 billion. A loan of $3.5 billion will be arranged to support project costs. Talks with global financial institutions, including the ADB, are ongoing.

Production is planned to start by 2028, according to Ministry of Finance officials. The first phase aims to extract 200,000 tonnes of copper annually. Phase I is expected to finish by 2029, while Phase II will begin in 2034. The new railway will play a key role in transporting these minerals efficiently. This agreement marks a milestone in one of Pakistan’s largest mining projects.