PAKISTAN’s Planning Commission is considering a proposal to use a bridging loan to part-fund the Rs 280bn ($US 1bn) Main Line 3 (ML-3) upgrade project, covering the 996km section running from Rohri to Sibi, Quetta and Koh-e-Taftan on the border with Iran.

Worth $US 390m and repayable as a lump sum within two years, the loan would be provided by joint public and privately-owned Reko Diq Mining Company (RDMC) which is developing copper and gold deposits at Reko Diq in the Chagai district of Balochistan. According to RDMC, these are amongst the largest undeveloped deposits of their kind in the world.

Barrick Gold Corporation of Canada owns 50% of RDMC, with 25% held by the government of the province of Balochistan and the remaining 25% by Pakistan government-owned companies Oil & Gas Development Company (OGDCL), Pakistan Petroleum (PPL) and Government Holdings (GHPL).

The expected increase in mining activity at Reko Diq has made the upgrade of the Rohri - Sibi and Quetta - Taftan sections of ML-3 a priority as the road network is considered incapable of meeting the transport requirements of the development project. At the same time, ML-3 infrastructure is in poor condition, with a maximum speed of 15km/h and around two freight trains a month operating between Quetta and Taftan.

To handle export traffic moving to the ports of Gwadar and Karachi, the maximum speed would be raised to 100km/h and capacity increased. The upgrade will include track renewals, rehabilitation of embankments and bridges and the construction of 11 stations between Spezand and Taftan.

Phase 1 of the project, running from 2026 to 2030 and costed at $US 585m, will focus on critical infrastructure work. The remaining priority work will be completed during Phase 2, running from 2031 to 2033 and estimated to cost $US 145m.

Security concerns

Expected to total $US 162m during the construction phase alone, security costs are estimated to make up 17% of total project cost. The Planning Commission has also raised concerns over inadequate planning for keeping the upgraded line secure following completion, following recent terrorist attacks and security incidents on ML-3.

According to local news outlet Dawn, the commission has noted that the bridge financing arrangement, requiring the Pakistan government to repay RDMC in full by June 2028, could create significant fiscal pressure and repayment risk.

The ML-3 upgrade project is ultimately expected to be financed through the government’s Public Sector Development Programme (PSDP), but only Rs 250m has been allocated to it in the 2026-27 PSDP budget.

“If funding cannot be arranged in time, the project will be delayed, resulting in substantial cost escalation, as witnessed in previous railway projects,” the commission says.