ADB to back Pakistan rail upgrade as China financing stalls, sources say

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FILE PHOTO: Passengers get on board a train at the Cantonment railway station in Karachi, Pakistan, April 8, 2024. REUTERS/Akhtar Soomro/File Photo

ISLAMABAD - The Asian Development Bank will fund upgrades to part of Pakistans creaking railway system, replacing China, after prolonged delays in securing financing from Beijing threatened to put a strain on a strategic mining project, two sources said on Friday.

An extensive revamp of 1,800 km (1,118 miles) of railways has been the centrepiece of a $60 billion Chinese investment programme in Pakistan announced in 2015 as part of Beijings Belt and Road Initiative global infrastructure push.

A decade of negotiations, however, have yet to produce a finance package for the rail upgrades - the single biggest project under the programme with China. And Pakistan is, meanwhile, struggling to repay Chinese debt owed for other projects.

The ADB is in advanced talks to lead the financing of a $2 billion upgrade of a 500-km stretch of the railway line from Karachi to Rohri in the countrys south that had previously been part of the Chinese project, two sources with direct knowledge of the discussions told Reuters.

The upgrade has become urgent, they said, as it is needed to transport copper ore from the Reko Diq mine currently being developed by Canadas Barrick Mining Corp.

We will have a crisis. How will you evacuate output from Reko Diq? The exhausted line will come under even more pressure, one of the sources, a senior government official, said.

There was no immediate comment from Pakistans