Pakistan, Uzbekistan to devise joint strategy for completion of UAP rail connectivity project

Pakistan’s Railways Minister Hanif Abbasi meets Uzbek Ambassador to Islamabad Alisher Tukhtaev (left) in Islamabad on June 3, 2025. (PID)
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Updated 03 June 2025
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Pakistan, Uzbekistan to devise joint strategy for completion of UAP rail connectivity project

  • The $4.8 billion project aims to enhance regional trade and logistics movement by connecting the three countries
  • It is part of Pakistan’s efforts to position itself as a key transit hub, connecting landlocked Central Asia to the world

ISLAMABAD: Pakistan and Uzbekistan have agreed to formulate a joint strategy for the completion of the Uzbekistan-Afghanistan-Pakistan (UAP) railway project, Pakistani state media reported, amid Islamabad’s efforts to open new regional trade avenues.

The development followed a meeting between Pakistan’s Railways Minister Hanif Abbasi and Uzbek Ambassador to Islamabad, during which the two figures held detailed discussions on the approximately 850-kilometer-long railway connectivity project, which includes a 647-kilometer rail track passing through Afghanistan.

The trilateral initiative was launched in 2021 to enhance regional connectivity by linking Central Asia with Pakistan’s southern ports of Gwadar and Karachi through Afghanistan. The project aims to improve trade access for landlocked countries and strengthen economic integration across the region.

“Upon completion of this project, Pakistan will gain the shortest and most efficient route to Central Asia, which will not only increase trade volumes but also strengthen the region’s economy on a solid footing,” Abbasi was quoted as saying by the APP news agency.

“This railway corridor will significantly reduce transit time and transportation costs, benefiting all stakeholders.”

Pakistan is seeking to leverage its strategic position as a key trade and transit hub to connect Central Asia with global markets and since last year, there has been a flurry of high-level visits, investment discussions and other economic engagements between Islamabad and Central Asian republics.

Abbasi highlighted that the corridor is expected to handle an annual freight capacity of 15 million tons, which could help boost exports and imports across the region, according to the report.

“This project will not only reinforce economic ties but will also play a pivotal role in promoting regional peace and stability,” he said.

On the occasion, Ambassador Tukhtaev acknowledged investment opportunities in Pakistan’s railway sector and emphasized the importance of collaborative efforts to foster economic prosperity and create employment for both peoples, according to the APP report.

Both officials also acknowledged the positive impact of the UAP project in promoting peace and stability in Afghanistan.

Last week, Pakistan’s Deputy Prime Minister Ishaq Dar also held a phone call with his Uzbek counterpart, Saidov Bakhtiyor Odilovich, to discuss steps to advance the UAP railway project, including the framework agreement and its signing mechanism.

Over the years, the project has faced significant challenges, including security concerns in Afghanistan, and the need to reconcile differing railway gauges across the three countries.

“Emphasizing the importance of the Uzbekistan-Afghanistan-Pakistan (UAP) Railway Line Project for regional connectivity, both leaders agreed to work closely for an early finalization of the framework agreement,” the Pakistani foreign office said.


Pakistan finance chief calls for change to population-based revenue-sharing formula

Updated 14 February 2026
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Pakistan finance chief calls for change to population-based revenue-sharing formula

  • Muhammad Aurangzeb criticizes current NFC formula, says it is holding back development
  • Minister says Pakistan to repay $1.3 billion debt in April as economic indicators improve

ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb said on Saturday the country’s revenue-sharing formula between the federal and provincial governments “has to change,” arguing that allocating the bulk of funds on the basis of population was holding back long-term development.

The revenue-sharing is done under the National Finance Commission (NFC) Award that determines how federally collected taxes are divided between the center and the provinces. Under the current formula, much of the distribution weight is based on population, with smaller weightages assigned to factors such as poverty, revenue generation and inverse population density.

“Under the NFC award, 82 percent allocation is done on the basis of population,” Aurangzeb said while addressing the Federation of Pakistan Chambers of Commerce & Industry’s regional office in Lahore. “This has to change. This is one area which is going to hold us back from realizing the full potential of this country.”

Economists and policy analysts have long suggested broadening the NFC criteria to give greater weight to tax effort, human development indicators and environmental risk, though any change would require political consensus among provinces, making reform politically sensitive.

Aurangzeb also highlighted the economic achievements of the country in recent years, saying Pakistan’s import cover had improved from roughly two weeks just a few years ago to about 2.5 months currently, adding that the government had repaid a $500 million Eurobond last year.

“The next repayment is of $1.3 billion in April,” he continued, adding that “we will pay these obligations, which are the obligations of Pakistan, as we go forward.”

The minister also noted that unlike in 2022, when devastating floods forced Pakistan to seek international pledges at a Geneva conference, the government did not issue an international appeal during more recent flooding, arguing that fiscal buffers had strengthened.

“This time, the prime minister and the cabinet decided that we do not need to go for international appeal because we have the means,” he said.

He reiterated the government was pursuing export-led growth to avoid repeating past boom-and-bust cycles driven by import-led expansion that quickly depleted foreign exchange reserves and pushed Pakistan back into International Monetary Fund programs.