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NLC and DP World signed a commercial agreement with Pakistan Railways for the $400 million Dedicated Freight Corridor Papri project
BeNewz Report
Pakistan Railways has signed a landmark commercial agreement with the National Logistics Corporation (NLC) and Dubai-based DP World for the construction of the Dedicated Freight Corridor (DFC) Papri Phase 1, a project that is expected to inject $400 million in direct foreign investment into the country’s logistics sector.
The signing ceremony in Islamabad was attended by Federal Minister for Railways Muhammad Hanif Abbasi, senior officials from NLC, DP World, the Special Investment Facilitation Council (SIFC), and Pakistan Railways.
The DFC Papri project aims to modernize Pakistan’s freight transport by significantly boosting the cargo-handling capacity of Pakistan Railways. According to officials, the new freight corridor will enable faster movement of goods to and from Karachi Port, helping reduce congestion both at the port and on national highways. This is expected to ease supply chain bottlenecks, improve trade efficiency, and lower logistics costs for importers and exporters.
The investment, estimated at approximately $400 million, will be financed as foreign direct investment through DP World and supported by NLC’s logistics expertise. The project is being positioned as one of the largest private sector-driven rail freight initiatives in Pakistan, aligning with the government’s push for modernizing infrastructure and attracting foreign investment.
Federal Minister Hanif Abbasi, while addressing the ceremony, said the initiative would not only transform the freight sector but also generate new revenue streams for Pakistan Railways. He explained that income would be earned through freight charges, track access fees, and related tax revenues, making the project a sustainable financial model for the struggling state-run railway system.
He added that Pakistan Railways’ long-term survival depends on strengthening its freight operations, as passenger services alone cannot cover rising operational costs. The minister emphasized that the DFC Papri project represents a strategic shift from road to rail for goods movement, a trend already adopted in many developed economies to reduce road congestion and carbon emissions.
DP World, which operates ports and logistics hubs in more than 60 countries, views the agreement as part of its broader strategy to expand in South Asia’s growing logistics market. The company has already invested in Pakistan’s port terminals, and the rail freight project will allow seamless integration between sea and land transport. NLC, the state-owned logistics enterprise, will contribute operational support and expertise in multimodal transport solutions.
Industry observers note that Pakistan has long struggled with inadequate rail freight capacity, forcing most cargo to move by road despite higher costs and environmental impact. The current rail share of freight is less than 5%, compared to nearly 30% in India and above 40% in several developed economies. By investing in the DFC, Pakistan aims to reverse decades of decline in its rail system and realign with regional trends.
The project also holds geopolitical significance. With trade volumes increasing under the China-Pakistan Economic Corridor (CPEC), efficient cargo movement from ports to inland industrial zones has become a critical requirement. Officials suggest that the DFC Papri could later connect with wider regional trade corridors, positioning Pakistan as a transit hub for South and Central Asia.
The government has welcomed the role of the United Arab Emirates in supporting this initiative through DP World. Minister Abbasi extended his appreciation to the UAE government, NLC, and DP World for their collaboration in what he termed a “historic milestone” for Pakistan’s railways. He reiterated that the success of such projects would not only reduce logistics costs but also improve Pakistan’s competitiveness in global trade.
The signing of the DFC Papri agreement comes at a time when Pakistan is seeking to revive investor confidence amid an economic stabilization program. By securing a large-scale foreign investment project in the transport sector, officials hope to signal that the country remains an attractive destination for infrastructure partnerships.
In conclusion, the Dedicated Freight Corridor Papri represents both an infrastructure upgrade and an economic opportunity. By expanding Pakistan Railways’ cargo capacity, integrating port logistics, and attracting foreign capital, the project is expected to play a key role in reshaping Pakistan’s trade and transport landscape. The government is optimistic that this will pave the way for similar partnerships, ultimately strengthening Pakistan’s position as a regional logistics hub.
