Pakistan is looking to attract investment from Saudi Arabia and the United Arab Emirates (UAE) to modernise its ageing railway infrastructure, with Railways Minister Hanif Abbasi confirming that $2.5 billion is needed to upgrade the critical Multan-Lahore section.
According to a report by Arab News, Pakistan’s railway network, much of which dates back to the 19th century during British colonial rule, has long awaited modernisation. Previous governments have sought foreign investment to fund improvements, but progress has been slow, particularly on projects promised under the China-Pakistan Economic Corridor (CPEC).
The modernisation of over 1,800 kilometres of track was supposed to be the centrepiece of the $60 billion CPEC initiative announced in 2015, but no financing deal has yet materialised.
However, the Asian Development Bank has shown interest in funding upgrades, including a $2 billion project for the Karachi-Rohri route.
Abbasi highlighted Pakistan’s efforts to engage Gulf investors during upcoming trips to Saudi Arabia and the UAE. “I am going to Saudi Arabia for two days on October 19-20 and to the UAE from September 30 to October 2. All these trips are related to railways,” he said. “We will meet with Saudi officials and try to attract investment in Pakistan Railways.”
Abbasi explained that Pakistan would offer a build-operate-transfer (BOT) model to investors, where foreign investors would be allowed to operate sections of the railway network for 25 years. He specifically mentioned the Multan-Lahore and Lahore-Rawalpindi routes as potential areas for investment.
In addition to Saudi Arabia, Abbasi confirmed that similar proposals have been extended to the UAE, with a focus on the Multan and Lahore sections. “We need around $2.5 billion for the Multan and Lahore routes,” Abbasi stated.
Abbasi also mentioned discussions with officials from Mashreq Bank, a Dubai-based institution that recently launched Shariah-compliant digital banking services in Pakistan. While Mashreq’s current focus is on digital banking, Abbasi confirmed that potential opportunities in the railway sector were part of their ongoing talks.
Now this is a positive development.