Islamabad: China will provide a whopping USD 5.5 billion to Pakistan for the expansion and renovation of its main rail link connecting Peshawar and Karachi as part of the investment under the China-Pakistan Economic Corridor, media reports said on Friday.

Out of the total cost of USD eight billion for the ML-I (Peshawar-Karachi) railway project connecting the country’s north and south, China will provide USD 5.5 billion in a concessionary loan at an interest rate of less than two per cent, said Minister for Planning, Development and Reform Ahsan Iqbal here after returning from China.

With this loan, the total cost of the China-Pakistan Economic Corridor (CPEC) projects, which runs through the Pakistan-occupied Kashmir, will increase to more than USD 51.5 billion, Express Tribune reported on Friday.

About 75 per cent of the country’s cargo and passenger traffic passes through the 1,687 km-long Peshawar-Karachi rail line.

Earlier, China had agreed to provide USD 3.7 billion out of the USD 46-billion CPEC programme for the ML-I project and “now it has decided to increase its contribution to USD 5.5 billion,” Iqbal said.

The Asian Development Bank (ADB) would provide USD 2.5 billion to cover the remaining cost of the project, he said.

The Peshawar-Lahore section of the ML-I will be built with the ADB loan.

The rail project would be completed in five to six years after which the rail speed would double to 180 kilometres per hour.

PTI