Pakistan’s railway sector, in dire need of a modernization boost, stands on the verge of significant investments totaling up to $1 billion from Russia and the United Arab Emirates (UAE). The primary focus of negotiations between Pakistan and these nations centers around revitalizing the railway sector, which has faced challenges and diminished significance, partly due to competition from the tanker industry.
Russia has pledged to inject funds ranging between $550 million and $660 million for the upgrade of the Quetta-Taftan railway line in Balochistan. This commitment was solidified during a visit by Pakistan Railway’s minister and secretary to Russia in December 2023, with ongoing efforts to finalize a government-to-government (G2G) framework agreement.
Overseeing the progress of this investment plan is Pakistan’s ambassador to Russia, a role of particular significance following the recent success of importing oil from Russia, strengthening economic ties between the two countries. Beyond railway upgrades, Russia has expressed interest in revitalizing Pakistan Steel Mills (PSM) and modernizing older power plants in Pakistan.
Simultaneously, the UAE is contemplating an investment ranging from $350 million to $400 million for the construction of a dedicated freight corridor in Pakistan.
This potential investment aligns with the UAE’s ongoing economic engagements in Pakistan, including a recent agreement to invest in a port terminal in Karachi, highlighting a shared vision for enhancing infrastructure and economic collaboration.