$390m Reko Diq bridge loan to fund Pakistan Railways' Main Line-3 project

Pakistan Railways' crucial Main Line-3 project, a 996-kilometer upgrade of the Rohri-Sibi-Quetta-Koh-i-Taftan rail line, is set to receive a $390 million bridge loan from the Reko Diq Mining Company (RDMC). This financing aims to overcome financial constraints for the Rs280 billion project, which is designed to boost mineral exports and enhance regional connectivity with Iran and Turkiye, while also improving access to Gwadar Port.

The loan arrangement, however, has drawn scrutiny from the Planning Commission. Officials have raised concerns about the foreign exchange exposure, the substantial security costs estimated at Rs46.38 billion (nearly 17% of the total cost), and the lack of adequate planning for post-completion security. The commission highlighted the potential for significant fiscal pressure and repayment risks, as the federal government is obligated to repay RDMC in full by June 2028.

The ML-3 upgrade is primarily intended to facilitate transportation for the multi-billion-dollar Reko Diq copper and gold project. RDMC is a joint venture involving Canada's Barrick Gold Corporation and Balochistan government entities. Despite the prime minister and the Economic Coordination Committee approving the bridge financing, only a minimal Rs250 million has been allocated in the Public Sector Development Programme for FY2026-27, underscoring the reliance on the interim loan.

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Officials say upgraded corridor will boost mineral exports, strengthen regional connectivity with Iran and Turkiye, improve access to Gwadar Port