KARACHI: Pakistan will ensure funding for major railway modernization projects in its upcoming federal budget, Prime Minister Shehbaz Sharif said on Wednesday, as the government seeks to improve freight transportation, strengthen trade logistics and revive the country's aging rail infrastructure.
The commitment comes as Pakistan pursues infrastructure upgrades to support economic growth and exports under a broader reform agenda backed by a $7 billion International Monetary Fund (IMF) program. Successive governments have identified railways as a critical component of efforts to reduce logistics costs, improve connectivity and ease pressure on the country's road network.
The federal budget for fiscal year 2026-27 is scheduled to be presented on June 10.
“Budget allocations for railway mega projects will be ensured in the upcoming budget,” Sharif said while chairing a meeting to review progress on railway development projects, according to a statement issued by his office.
Pakistan's railway network, much of which dates back to the British colonial era, has suffered from decades of underinvestment, operational inefficiencies and financial losses. The government has in recent years sought to revive the sector through infrastructure upgrades and efforts to increase freight traffic, which generates higher revenues than passenger services.
Sharif directed authorities to prioritize investment in freight services and ensure the timely completion of major projects, saying modern cargo transport infrastructure could increase railway revenues while facilitating the movement of industrial goods across the country.
“World-class freight services can not only facilitate the transportation of industrial products but also significantly increase Pakistan Railways' annual revenues,” the prime minister said.
The Prime Minister's Office said federal and provincial authorities would work together to accelerate the completion of major projects, particularly the ML-1 and ML-3 railway corridors and the Thar Coal Rail Connectivity Project.
ML-1, the centerpiece of Pakistan's rail modernization plans, envisages the upgrading of the country's main north-south railway line linking Karachi with Peshawar. The project has long been associated with the China-Pakistan Economic Corridor (CPEC), though financing and implementation arrangements have faced repeated delays.
Officials briefing the meeting said reforms introduced in freight operations had improved performance and were expected to generate record revenue.
“Due to reform measures in freight services, a historic revenue of up to Rs40 billion ($144 million) is expected by June this year,” the statement said.
The government also highlighted ongoing work on road and rail connectivity projects designed to improve access between Pakistan's ports and industrial centers, including freight corridors linked to Karachi.
Sharif directed ministries and implementing agencies to secure financial and administrative approvals for ongoing projects in advance to avoid delays and cost overruns, saying timely completion would help reduce construction costs and improve the efficiency of public investment.
