Govt to issue bonds for rail line
The government has decided to float bonds to arrange financing for a railway track project planned for transporting copper and gold from mines in Balochistan.
Sources told The Express Tribune that in a recent meeting of the Economic Coordination Committee (ECC), the Ministry of Finance emphasised the importance of the rail line project.
The ECC noted that success would depend on contributions from Barrick Group and Reko Diq Mining Company (RDMC), which were providing bridge financing, and to refinance the scheme, bonds would be floated. It was pointed out that 7% of the funding would come from securitisation, while the rest would be provided by the government of Pakistan. The project duration is estimated at 37 years.
The Finance Division pointed out that the Railways Division had not shared the Rail Development Agreement. The ECC directed the Railways Division to provide the agreement to the Finance Division and resubmit the case to the ECC, if any material change was required.
The ECC asked the Finance Division to start planning in the fourth quarter of the current financial year to oversee all the modalities involved in the proposal. It also directed the Ministry of Railways and Finance Division to come up with a comprehensive execution and implementation plan, along with a refinancing plan, by the end of March 2026.
The Ministry of Railways briefed the economic decision-making body that the Reko Diq project had been declared a qualified investment under the Act of parliament, known as the Promotion and Protection Act, 2022.
Access to the railway track is crucial for transporting copper-gold concentrate from the mines in Balochistan for export to overseas markets. It will provide a reliable and efficient bulk transport solution for large volumes of minerals across the 1,330 km route.
The rail link is necessary for commercial stability of the project by ensuring that the concentrate is shipped to global buyers for further processing and sale.
In January 2025, the Ministry of Energy requested the Railways Division to conduct a survey of the potential rail connectivity in coordination with RDMC. Consequently, route surveys were undertaken and RDMC showed preference for a rail link via Port Qasim to connect Mainline (ML)-III and ML-I.
Technical assessments by Vecturis and subsequent deliberations through joint working groups of railways (technical, operational and legal) shaped the framework of the project, addressing matters pertaining to design, track access, responsibilities and operations.
On June 17, 2025, a committee under the chairmanship of the minister for economic affairs recommended a bridge financing of $390 million for the project. The prime minister approved it on August 8, 2025.
To accommodate the planned movement of RDMC concentrate from the mining site to Karachi Port, the existing ML-III railway section from Nokundi to Rohri requires urgent upgrade, as its current condition cannot sustain the projected freight load. Accordingly, the railways is entering into a Rail Development Agreement and a $390 million bridge financing deal with RDMC to support the construction and upgrading of ML-III.
The financing is being extended for three years at Secured Overnight Financing Rate (SOFR) + 250 basis points. The government of Pakistan will act as the guarantor. As per the agreed term sheet, the entire principal amount, along with accrued interest, will be repaid in a bullet payment arrangement at the end of the three-year period.
It was informed that both agreements had been vetted by the Ministry of Law and Justice and the inputs made were incorporated. Clearance from the Cabinet Division and the Ministry of Foreign Affairs had also been obtained.
The Ministry of Railways solicited approval of the ECC for the proposal. The ECC considered a summary titled "Rail Agreements Relating to Reko Diq Project" and approved the proposal.