The groundbreaking of Pakistan Railway's Main Line (ML-1) project will take place in early 2027, the federal planning minister revealed Tuesday. “We are going to start work on Karachi-Rohri section of ML-1 during next financial year and its groundbreaking will take place after January 2027,” Federal Minister for Planning Ahsan Iqbal said while responding a question in a media briefing.
Funding and Multilateral Support
When asked whether China had refused to fund ML-1, the minister said multilateral funding was always part of the CPEC framework agreement. He added that Asian Development Bank's funding for the project is being availed with China's consent. He said it was agreed with China under the CPEC framework that ML-1 would be financed jointly through Chinese, Pakistani and multilateral sources.
Diamer Bhasha Dam Cost Escalation
When questioned about the Auditor General's findings on irregularities in awarding the Diamer Bhasha Dam's civil work contract to PowerChina-FWO Joint Venture at Rs442.40 billion (31.47% above the PC-I cost), the minister attributed the decision to the previous government. He added that project delays and funding shortages have since escalated the dam's cost to Rs 1.3 trillion.
Infrastructure Developments
Sharing updates on infrastructure development, Ahsan Iqbal announced that work will begin during the new fiscal year on the Karachi–Hyderabad M-9 expansion, the Sukkur–Hyderabad–Karachi M-6 Motorway, and the Chaman–Quetta–Karachi Highway. He also confirmed that work on the Main Line-1 (ML-1) railway project under CPEC will commence from the Rohri section.
Karakoram Highway-II and Quantum Valley
The minister further announced that the government will launch the Karakoram Highway-II project to replace the approximately 100-kilometre stretch of the existing highway that will be affected by the construction of the Diamer-Bhasha Dam, ensuring uninterrupted trade connectivity between Pakistan and China. He also announced the establishment of a Quantum Valley in Islamabad to promote advanced technologies, innovation and a knowledge-based economy.
Higher Education Reforms
Turning to higher education reforms, the minister said that the government had recently directed the Higher Education Commission (HEC) to conduct a comprehensive review of universities across Pakistan and redesign degree programmes and curricula according to future national and global requirements. He said universities would also undergo a seven-point performance audit to assess academic relevance, teaching quality and alignment with emerging labour market needs. The findings, he said, will guide comprehensive reforms in Pakistan's higher education sector.
Economic Indicators and Remittances
Referring to inflation, the minister acknowledged that international oil prices, higher freight costs and global supply disruptions created renewed inflationary pressures during April and May 2026. Highlighting the resilience of Pakistan's external sector, the minister said overseas Pakistanis continued to demonstrate confidence in the country's economic management. Workers' remittances increased by 9.2 percent to $38.1 billion during July–May FY2025–26, while May 2026 recorded the highest-ever monthly inflow of $4.3 billion. Services exports grew by 17.4 percent, driven largely by the information technology sector, while the current account remained in surplus due to rising remittances and expanding IT exports.
Eid-ul-Azha Economic Activity
Discussing the economic impact of Eid-ul-Azha, the minister said the Planning Commission's assessment estimated economic activity worth approximately Rs1.7 trillion during Eid-ul-Azha 2026, equivalent to around 1.4 percent of GDP. Livestock trade increased to 7.7 million animals, while economic activity expanded across livestock markets, retail trade, transportation, butchery services and the leather industry. He said development spending had accelerated significantly during the outgoing fiscal year, with PSDP utilization reaching 64.6 percent of the revised allocation by May 2026.
