Sources say ADB to fund Pakistan Railways upgrade

ISLAMABAD: The Asian Development Bank (ADB) will fund upgrades to part of Pakistan’s creaking railway, Reuters says in an exclusive report which is based upon two sources, as Friday also saw the lender approving of funds for the Reko Diq copper-gold mine that “will help meet rising global demand for critical minerals”.

According to Reuters, 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 country’s south.

The upgrade has become urgent, the two sources said, as it is needed to transport copper ore from the Reko Diq mine currently being developed by Canada’s 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.

A BOOST TO CPEC

The latest Reuters report, which hasn’t been confirmed officially, comes just a day after the visiting Chinese foreign minister, Wang Yi, expressed his country’s interest in developing the mineral resources in Pakistan.  

Read more: China eyes mining cooperation with Pakistan, CPEC upgrade

If true, the ADB funding would help forwarding the China-Pakistan agenda of revitalising the CPEC – a part of the Belt and Road Initiative (BRI) conceived and pursued by President Xi Jinping.

About the decision to finance the copper-gold mine, ADB President Masato Kanda said, “Reko Diq will help the critical minerals supply chain, while advancing the clean energy transition and driving digital innovation across the region and beyond” .

“ADB’s support is also a game-changer for Pakistan, creating quality jobs and underpinning the nation’s transition toward a more resilient and diversified economy,” Kanda added.

NO COMMENTS

Meanwhile, Reuters says there was no immediate comment from Pakistan’s railways ministry.

Similarly, the ADB would not confirm the finance package, which is being reported for the first time by Reuters. But it said Pakistan’s government and the regional lender “have regular discussions on railway sector development”.

“Any potential ADB assistance would be subject to comprehensive due diligence and consideration under ADB’s policies and procedures before any commitment is made,” it wrote in a statement to Reuters.

The deal, expected to be announced later this month, would see the ADB lead a consortium to finance the project and bring in an international engineering contractor to carry out the work through a competitive bidding process, the sources said.

On Friday, the ADB announced $410 million in financing for the Reko Diq mine itself earlier this week. And its president is due to visit Islamabad next week, the sources said.

PAKISTAN’S MINING AMBITIONS

The Reko Diq copper and gold mine – at the heart of the government’s strategy to attract investment to Pakistan’s mining sector – is due to enter production in 2028 with anticipated annual output of some 200,000 metric ton of copper concentrate.

One of the world’s largest untapped copper deposits, it is Pakistan’s largest foreign investment in recent years.

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The ADB-financed rail upgrade would modernise the track and bridges from the commercial capital Karachi north to Rohri, close to the city of Sukkur, so that diesel trains can run faster, the sources said.

In Rohri, the line will meet a branch coming from the area of the Reko Diq mine and will carry the copper concentrate to port.

Tim Cribb, Reko Diq’s project director, told Reuters that the government and Barrick would work together on securing financing for the upgrading of the branch coming from the west to Rohri.