Pakistan’s railway sector, seeking a much-needed modernization boost, is on the brink of receiving substantial investments totaling up to $1 billion from Russia and the United Arab Emirates (UAE). The primary focus of negotiations between Pakistan and these nations revolves around the rejuvenation of the railway sector, which has faced challenges and diminished in significance, partly due to competition from the tanker industry.
Russia has committed to injecting 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.
Monitoring the progress of this investment plan is Pakistan’s ambassador to Russia, particularly significant following the recent success of importing oil from Russia, strengthening economic ties between the two countries. Beyond railway upgrades, Russia has also expressed interest in revitalizing Pakistan Steel Mills (PSM) and modernizing older power plants in Pakistan.
Concurrently, the UAE is considering 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.
