FWO offers to construct Multan-Rohri ML-1 railway section with local bank financing

Profit, citing The Express Tribune, reported that the government is weighing a Rs470 billion offer from the Frontier Works Organisation (FWO) to build the Multan-Rohri stretch of the ML-1 railway on a build-lease-transfer basis. Under the plan, FWO would complete the work within three years, relying mainly on loans from domestic commercial banks. Financing would see FWO borrow up to 80% of the cost, with federal funding covering at least 20% and potentially as much as 40%.

Planning Minister Ahsan Iqbal said the project will not receive viability gap funding (VGF) from PSDP, though other grant mechanisms could be explored. Based on the Rs470 billion cost, the federal grant share might fall between Rs91 billion and Rs182 billion. Once built, the track would pass to Pakistan Railways on a 25-year lease, with ownership transferring after that period ends.

Two issues remain open: who will repay the commercial bank debt and how large the sovereign guarantees must be. Pakistan Railways is reluctant to take on full repayment, while the Finance Ministry has not clearly consented to guarantees and wants the railways to judge how much debt it can repay itself. Officials said the build-lease-transfer structure has been agreed, though the financing model is still to be finalised, and the Public Private Partnership Authority presented financing options at the meeting.