Railway revenue rises 20% to Rs115b

Minister says ML-1 groundbreaking in Sept; ML-2 to be developed under PPP model

LAHORE:

Pakistan Railways posted a 20% increase in earnings during fiscal year 2025-26, with total revenue rising to Rs115 billion from Rs96 billion a year earlier, as the government eyes an even bigger role for freight operations to improve the financial health of the state-run entity.

Addressing a press briefing on Monday, Railways Minister Muhammad Hanif Abbasi said he was expecting revenue of Rs120 billion, but described the overall performance as encouraging given the regional and operational challenges faced during the year. Freight operations remained a key driver of growth, generating Rs41 billion compared to Rs36 billion in the previous fiscal year, an increase of nearly 14%. Passenger services continued to contribute the largest share to the railway's income, with revenue standing at Rs51 billion.

The minister said Pakistan Railways has now set an ambitious freight revenue target of Rs65 billion for the current fiscal year, well above the passenger segment earnings target of Rs60 billion for FY2026-27. He said achieving this goal would depend on bringing more than 40 General Utility (GU) series locomotives into freight operations.

Abbasi said freight volumes remained below expectations last fiscal year because of disruptions caused by the Iran-US conflict in the Gulf region. Despite the slowdown, Pakistan Railways managed to increase freight earnings.

He said the railway will begin transporting automobiles and edible oil by September.

The minister added that the operational cost ratio declined to 84.7% in FY2025-26 from 96% in the previous year, indicating better financial discipline and more efficient use of resources.

To improve passenger services, Abbasi said the department is overhauling coaches, locomotives and power vans, while its digitisation programme is expected to be completed by the end of this year. The digital transformation is aimed at improving ticketing, cargo management and overall customer services.

On the long-awaited Main Line projects, Abbasi said Pakistan Railways hopes to hold the groundbreaking for ML-1 in September, depending on the Asian Development Bank (ADB)'s financing procedures.

He said completion of the planned 480-kilometre section under the ML-1 project would cut Lahore-Karachi travel time by five to six hours.

The minister also said upgrading ML-3 is crucial for expanding trade with Iran, adding that Pakistan Railways will soon invite tenders for the project to facilitate cross-border trade and passenger movement. Meanwhile, ML-2 will be developed under a public-private partnership (PPP) model to attract private investment.

Abbasi said special economic corridors would also be developed along the upgraded railway network to promote industrial activity and strengthen logistics infrastructure.

He added that Pakistan Railways, in collaboration with provincial governments, is also reviving neglected branch lines. In Punjab alone, eight branch lines will be rehabilitated in the first phase, a move expected to improve connectivity for remote and rural communities and provide easier access to economic opportunities and public services.