ML-1 Karachi-Rohri section upgradation: ADB mulling up to USD1.1bn financing

The Asian Development Bank (ADB) is contemplating financing up to USD 1.1 billion for the modernization of Pakistan Railways' Main Line-1 (ML-1) corridor, which stretches from Karachi to Rohri. This investment aims to upgrade the key passenger and freight route using sustainable infrastructure, advanced signalling systems, and enhanced railway operations.

The project, identified as "Upgradation of Pakistan Railways Main Line-1 (Karachi-Rohri Section) Project," is currently in the proposed stage and has received concept clearance on June 18, 2026. Prior to this, fact-finding is scheduled to take place from January 11-22, 2027, with no approval date yet set.

The proposed development would cover around 480 kilometers of the Karachi-Rohri section, a vital corridor that connects Pakistan's main port with the national railway network. The ADB has identified the country's railway infrastructure as being in poor condition and underutilized, which hampers transport efficiency, logistics competitiveness, and sustainable economic growth.

Decades of road-focused investments have led to an imbalanced transport system where roads handle the majority of passengers and freight, driving logistics costs to about 15 percent of GDP. Rail transport, particularly for bulk freight, is cheaper and cleaner but remains underutilized.

The proposed investment seeks to shift freight from roads to rail while enhancing passenger mobility, safety, and connectivity. It will focus on building climate-resilient and high-capacity railway and port connections, upgrading signalling, modernizing railway operations, and improving operations, maintenance, and asset management.

The ADB expects that the project will increase the efficiency, safety, and sustainability of railway transport along the Karachi-Rohri section by 2040. The investment is crucial for improving connectivity, facilitating trade, and promoting a more sustainable transport system in Pakistan.

However, the ADB emphasizes that infrastructure alone is not enough and must be accompanied by deep institutional and financial reforms in Pakistan Railways. The financing package includes ordinary capital resources and concessional resources under a multitranche facility. The project carries a high environmental and social risk classification, reflecting its scale and complexity.

The ADB's safeguards cover environmental and social risk management, labor and working conditions, pollution prevention, health and safety, land acquisition, biodiversity, cultural heritage, climate change, and stakeholder engagement.

Improved railway infrastructure could benefit rural communities, informal enterprises, low-income families, and vulnerable groups, such as women, the elderly, persons with disabilities, and children, by providing more affordable access to essential services. The project aligns with Pakistan's broader transport policy goals, including shifting freight from roads to rail, modernizing core railway infrastructure, and establishing a faster, safer, and more sustainable railway network.

This investment represents a significant expansion of multilateral financing for Pakistan's railway sector, focusing on both physical infrastructure and the necessary institutional reforms for long-term sustainability.