ISLAMABAD: The government has once again postponed the approval of a $1 billion project to rehabilitate and upgrade Pakistan Railways’ ML-3 track to transport minerals from the Reko Diq mines.
The main reasons for the delay in the project have been cited as lack of financial resources and a possible proposal to use Gwadar port instead of Karachi for exporting minerals.
According to officials from the Ministry of Planning, the Central Development Working Party has postponed the approval of the project to rehabilitate the 996-km-long ML-3 railway track from Nokundi to Rohri for the third time in the last five months. The project is estimated to cost about Rs 278 billion.
Officials say that the ML-3 track has completed its intended service life and trains are running on it at an average speed of 30 kmph.
Complete rehabilitation of the track is necessary to enable the transport of the huge amount of minerals coming out of Reko Diq by railway.
Federal Minister for Planning Ahsan Iqbal, in response to a question on the matter, said that the approval of the project has been postponed due to the details of the bridge financing with Barrick Gold and further information sought in this regard. The government has already approved a loan of $390 million from the Reko Diq Mining Company, on which an interest of about 6 percent will be paid annually.
This loan is to be used as interim financial assistance for the rehabilitation of ML-3. According to officials, if the route of transportation of minerals is shifted to Gwadar instead of Karachi, a new assurance will have to be obtained from Barrick Gold that the company will provide the loan in this case too.
Under the initial plan, the minerals were to be transported to Karachi port via Nokundi, Quetta and Rohri, however, now the proposal to activate the Nokundi, Panjgur and Gwadar road link is under consideration.
A delegation from Barrick Gold recently met the Federal Minister for Planning and sought details of the Nokundi-Gwadar road project. Ahsan Iqbal has stressed the need to expedite work on the Nokundi-Gwadar Road Corridor through close cooperation between the federal government, the government of Balochistan, and mining companies.