Reporting snapshot · 31 October 2026 (Asia/Karachi). The figures come from a written reply the railways minister gave the Senate on Friday, 30 October. The $2.1 billion estimate covers only the 480km Karachi-Rohri section and will be revised once the detailed engineering design is finished; the government has not published a financing plan, a valuation of the railway land it wants to pledge, or the terms on which banks would lend against it.
What the Senate was told
Pakistan’s railways minister told the Senate on Friday, 30 October, that the first phase of the Mainline-I (ML-1) upgrade, the 480km Karachi-Rohri section, is estimated to cost about $2.1 billion, The Express Tribune reported. Hanif Abbasi said the final figure would be settled once the detailed engineering design is completed, and that construction could begin in the current fiscal year, subject to approvals, financing and procurement, with an implementation period of about two and a half years.
The same reply, reported by Profit, puts the whole 1,872km Karachi-Peshawar project at about $10 billion and records that Pakistan could not secure $8 billion of Chinese funding for it, despite ML-1 being the flagship transport scheme under the China-Pakistan Economic Corridor. The minister’s reply describes the Karachi-Rohri section as the first phase and the Multan-Rohri section as the second.
The prime minister, Shehbaz Sharif, has meanwhile constituted a committee headed by the State Bank of Pakistan governor to formalise a financing plan for the second phase. The committee met this week to examine ways of securitising Pakistan Railways’ land, and Planning Minister Ahsan Iqbal told The Express Tribune that “trillions of rupees of land is lying vacant” and that the government was looking at giving the land to domestic commercial banks as collateral to raise funds.
How the second phase would be paid for
The proposal on the table comes from the Frontier Works Organisation (FWO), which has offered to build the Multan-Rohri section under a build-and-lease model at an estimated cost of Rs470 billion. About Rs365 billion of that would be borrowed, with the remainder sought from the federal government as a grant. Under the model described to the newspaper, FWO would complete the link in three years by borrowing a maximum of 80 per cent of the cost from local banks and securing at least 20 per cent from the government as viability gap funding. It would then hand the track to Pakistan Railways on a 25-year lease and transfer the title when the lease expires.
The structure has stalled over who carries the repayment obligation. According to the reporting, total lease payments over 25 years were estimated at Rs1.1 trillion, while the railways ministry indicated it was willing to pay only Rs29 billion. Pakistan Railways projected operating profits of Rs485 billion over the same period, and the finance ministry argued that at least that amount should be pledged against the debt. The railways ministry was unwilling to commit the full sum, and the finance ministry was unwilling to issue sovereign guarantees covering the entire 25-year repayment schedule.
That impasse is why the government is now looking at land rather than the budget. Pledging railway property to domestic commercial banks would move part of the financing burden off the federal guarantee ledger and on to the balance sheets of lenders, while leaving the railways to service the lease from its own revenue. The value of the land, the parcels that would be used and the legal mechanism for securitising them have not been published.
The safety record behind the numbers
The same Senate reply set out why the case for rebuilding the line is as much about safety as about speed. The railways ministry reported 299 accidents between 2023 and 2025, including 241 derailments of goods and passenger trains, according to The Express Tribune’s account of the reply. The yearly breakdown was 84 accidents in 2023, 118 in 2024 and 97 in 2025, including 37 head-on collisions. The reply described the three-year total as 300 accidents elsewhere in the same response, a one-incident discrepancy the ministry did not explain.
The ministry also conceded the condition of its assets. It said 67 per cent of the railway track and 60 per cent of the rolling stock had outlived their useful life, and that “there have not been significant investments in railway infrastructure, as required, for more than seven decades of our history”. It reported 22,546 vacant posts across pay scales 1 to 22, of which 12,165 are in Punjab, 7,245 in Sindh, 1,840 in Khyber Pakhtunkhwa and 1,296 in Balochistan.
Those figures sit alongside a run of accidents on the network. On 13 October, all 14 coaches of the Karachi-to-Peshawar Rehman Baba Express derailed near Multan, killing at least six passengers. In March, the Tezgam derailment in Lodhran prompted the railways minister to blame human and mechanical error. The Senate reply does not say how many of the 299 accidents were investigated or what share were attributed to track condition rather than to rolling stock, signalling or human error.
Why the financing model matters
ML-1 is the flagship transport scheme under CPEC and the 1,872km corridor that links Karachi to Peshawar, so its financing terms reach beyond the railway itself. The $8 billion shortfall against Chinese funding is the reason the project has been split and re-scoped, and the reason the government is testing structures that do not rely on a single bilateral lender.
The land-backed lease would also create a long fiscal commitment. A 25-year lease with payments estimated at Rs1.1 trillion is a liability that outlasts the current government and would compete with other claims on the railways’ revenue, including the cost of filling vacant posts and the maintenance backlog the ministry has acknowledged. The reply does not set out how the lease payments would be funded if passenger and freight revenue fall short of the Rs485 billion projection.
For passengers, the immediate question is whether the first phase begins on schedule. The ministry’s answer to the Senate ties the start of construction to approvals, financing and procurement, none of which has been completed. The second phase depends on a financing plan that the State Bank-led committee has not yet published.
What is still uncertain
Four things remain unresolved. First, the $2.1 billion figure is an estimate for the Karachi-Rohri section alone; the final cost will be fixed only after the detailed engineering design is completed, and the ministry has not given a date for that. Second, no financing plan, land valuation or list of properties has been published, so the scale of the collateral and the terms offered to banks cannot be checked. Third, the FWO proposal’s figures — Rs470 billion cost, Rs365 billion debt, Rs1.1 trillion in lease payments and Rs29 billion offered by the railways — come from officials cited in the reporting rather than from a signed agreement. Fourth, the safety data are the ministry’s own, and the one-incident difference between its 299 and 300 totals has not been explained.
