ADB assesses feasibility of financing ML-1 project

Experts from the Asian Development Bank (ADB) on Saturday inspected the Karachi to Rohri railway line, which forms a key section of the long-delayed Main Line-1 (ML-1) up-gradation project.

ADB Chief Transport Planner Sangyoon Kim, accompanied by Pakistan Railways' chief engineer open lines, examined the 480-kilometre track. Senior railway officials including infrastructure specialists, divisional superintendents of Karachi and Sukkur and other representatives were also present.

The ADB team is expected to meet the chief executive officer of Pakistan Railways, the additional general manager for infrastructure and Chinese experts currently working on the ML-1 project.

According to officials, the ADB's fact-finding specialists are preparing a detailed report to assess the feasibility and potential of financing the Karachi-Rohri segment, which is part of the first ML-1 package.

The proposed upgrading is vital not just for improving the country's railway system but also to support key economic projects. The completion of this section will ensure smoother and faster transportation of coal from Thar and easier access to strategic mineral resources like those in Reko Diq.

The ML-1 project has been in the pipeline for nearly two decades. Its first feasibility report was prepared in the early 2000s but progress remained slow due to the lack of political will and consistent financial constraints. The project regained momentum after the launch of the China-Pakistan Economic Corridor (CPEC) project in 2015, when ML-1 was included as a strategic infrastructure scheme.

Initially, China had shown keen interest in financing the entire ML-1 through concessionary loans. However, in later years, Beijing became hesitant, mainly due to Pakistan's worsening financial health, concerns over loan repayments and delays in other CPEC-related projects.

The original ML-1 stretches over 1,872 kilometres, running from Karachi to Peshawar and passing through major cities like Hyderabad, Rohri, Multan, Lahore and Rawalpindi. It connects over 90 railway stations and has the capacity to handle more than 75% of passenger and freight traffic.

Once completed, the project is expected to transform Pakistan Railways by reducing travel time by half, improving safety standards, increasing train speed up to 160 km per hour and significantly boosting freight capacity. It is expected to turn the country's outdated rail network into a modern, reliable and efficient transport system.

Initially, the cost of upgrading ML-1 was estimated at around $6.8 billion. However, due to changing designs, economic instability and currency depreciation, the financial estimate has been revised multiple times. The current estimated cost is around $6.6 billion, though further changes are possible depending on scope adjustments and financing terms.

China's reluctance to move forward with ML-1 financing has led Pakistan to approach other lenders, including the ADB. While the ADB has not yet committed funding for the entire project, their recent inspection and meetings indicate a strong interest in exploring different possibilities.

Officials believe that if Pakistan is able to present a well-structured proposal and show improved project management capacity, the ADB may step in either fully or partially to fund initial phases.

Pakistan Railways views ML-1 as a turning point for the sector's revival, but it is still unclear whether international lenders will step forward at a time when China has apparently pulled back. According to the officials, it will take some time – no one knows how much – before the ADB decides whether to finance the project or not, however, the railways at all levels is trying its best to get financing either entirely or partially, as train derailments in some sections are now becoming a routine, resulting in less passenger traffic.