PESHAWAR: A Dubai-based global port management company has formally partnered with Pakistan’s National Logistics Corporation (NLC) and Pakistan Railways to build the first phase of a $400 million freight corridor linking Karachi Port with the Pipri marshalling yard, a major rail hub on the city’s outskirts, said an official statement on Wednesday.

The freight corridor is aimed at improving the movement of goods from the country’s commercial hub to other regions.

Karachi Port currently handles 54 percent of Pakistan’s trade with an annual capacity of 125 million tons, and the government wants to streamline its operations as part of export-led growth plans.

The corridor project is funded by DP World and involves the construction of a dedicated double-track railway system along with supporting facilities, stretching about 50 kilometers from the port to the Pipri yard.

“The NLC, DP World signed commercial agreement with Pakistan Railways for construction of Phase-1 of the Dedicated Freight Corridor Pipri,” the NLC said in a statement on Wednesday.

The project will boost freight capacity of Pakistan Railways, speed up cargo movement and ease congestion at Karachi Port and on surrounding roads in the country’s largest and most densely populated city, it added.

On the occasion, Railways Minister Hanif Abbasi said the project would modernize freight transportation and strengthen revenues through freight charges, track access fees and revenue-sharing mechanisms.

Islamabad aims to capture a larger share of regional trade by investing in freight and port infrastructure.

Pakistan and the UAE last year signed two inter-governmental framework agreements to establish a dedicated rail freight corridor and an economic zone near Karachi, covering more than $3 billion in planned investments

DP World is already working with NLC to strengthen Pakistan’s logistics infrastructure. In August, the two organizations completed their first commercial cargo delivery from the UAE to Tajikistan via Karachi.

The shipment consisted of 38 tons of automotive spare parts, transported from Jebel Ali Port in Dubai to Karachi, and then moved overland to Dushanbe.

The entire journey took just 16 days, which DP World noted is the fastest transit time currently available between Dubai and Dushanbe.

Competing routes typically take between 20 and 70 days.