Islamabad eyes Saudi-linked port, shipping projects to boost Gulf–China connectivity

Pakistan’s Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry (right) chairs a meeting of the connectivity working group in Islamabad on September 26, 2025. (PID)
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Updated 26 September 2025
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Islamabad eyes Saudi-linked port, shipping projects to boost Gulf–China connectivity

  • Pakistan to draw up investment-ready roadmap linking Gulf, Central Asia, China through ports, rail and shipping
  • Maritime ministry says proposals include new terminals, direct shipping routes and green ship recycling yards

KARACHI: Pakistan is planning Saudi-linked port and shipping projects, including new gateway terminals, direct shipping routes and green ship recycling yards, as part of efforts to become a logistics bridge between the Gulf, Central Asia and China, the maritime ministry said on Friday.

Officials say Pakistan’s location at the mouth of the Arabian Sea gives it a strategic advantage in connecting Gulf energy exporters with China and the landlocked markets of Central Asia. With Gulf–China trade volumes rising and regional shipping routes expanding, Islamabad is seeking to position its ports as key nodes in emerging transport corridors.

According to a statement from the maritime ministry, Technical Adviser for Maritime Affairs Muhammad Jawad Akhtar proposed several new projects with Saudi Arabia.

These included “Karachi–KSA and Gwadar–KSA Gateway Terminals, expansion of the Pakistan National Shipping Corporation fleet under Saudi partnership, start direct shipping lines from Karachi to Jeddah and Gwadar to Dammam, and establish 20 green ship recycling yards at Gaddani,” the maritime ministry statement said.

Karachi Port and Port Qasim — Pakistan’s two largest and busiest seaports handling most of the country’s container and cargo traffic — along with Gwadar Port, a Chinese-developed deep-sea port near the mouth of the Arabian Gulf, are seen as key to these plans.

Maritime Affairs Minister Muhammad Junaid Anwar Chaudhry said the effort was part of a broader plan to integrate Pakistan’s ports and logistics infrastructure with regional trade routes.

“We are not merely compiling lists of projects; we are shaping a national roadmap for logistics and connectivity,” he said.

“Pakistan performs best under compressed timelines, and this is one such moment.”

Chaudhry said Karachi Port, Port Qasim and Gwadar Port would be central to the plan, which aims to link them to regional transport corridors through rail, road and air networks. 

He highlighted the importance of the long-delayed ML-1 railway modernization project — a planned multi-billion-dollar upgrade of Pakistan’s 150-year-old main railway line from Karachi in the south to Peshawar near the Afghan border — expected to boost freight and passenger traffic from the northwest province of Khyber Pakhtunkhwa to southern ports. He said Pakistan must align its development agenda with the connectivity needs of partner countries.

Chaudhry added that a joint working group bringing together the maritime, communications, railways and defense ministries would hold its first meeting next week to shortlist priority projects for rapid funding and development.

Other ministries outlined their own connectivity priorities. The communications ministry called for laying fiber optic cables along railway lines, expanding submarine cable networks and speeding up completion of the M-6 motorway — a 394-kilometer section of Pakistan’s north–south highway network linking the port city of Karachi to Sukkur in interior Sindh province — described as a missing link in the China–Pakistan Economic Corridor (CPEC), a multibillion-dollar infrastructure and energy program that is part of China’s Belt and Road Initiative.

The communications ministry also highlighted plans for an M-10 motorway extension through the Khirthar mountains in southern Pakistan to complement existing road infrastructure.

A petroleum ministry representative said a $300 million feasibility study was underway for a new merchant oil terminal at Hub, an industrial town near Karachi, as part of Pakistan State Oil’s infrastructure expansion strategy.

Chaudhry urged ministries to deliver a clear, investment-ready roadmap that would attract international financing and cement Pakistan’s role as a “central bridge” connecting the Gulf with Central Asia and China.


IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan

Updated 11 December 2025
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IMF warns against policy slippage amid weak recovery as it clears $1.2 billion for Pakistan

  • Pakistan rebuilt reserves, cut its deficit and slowed inflation sharply over the past one year
  • Fund says climate shocks, energy debt, stalled reforms threaten stability despite recent gains

ISLAMABAD: Pakistan’s economic recovery remains fragile despite a year of painful stabilization measures that helped pull the country back from the brink of default, the International Monetary Fund (IMF) warned on Thursday, after it approved a fresh $1.2 billion disbursement under its ongoing loan program.

The approval covers the second review of Pakistan’s Extended Fund Facility (EFF) and the first review of its climate-focused Resilience and Sustainability Facility (RSF), bringing total disbursements since last year to about $3.3 billion.

Pakistan entered the IMF program in September 2024 after years of weak revenues, soaring fiscal deficits, import controls, currency depletion and repeated climate shocks left the economy close to external default. A smaller stopgap arrangement earlier that year helped avert immediate default, but the current 37-month program was designed to restore macroeconomic stability through strict monetary tightening, currency adjustments, subsidy rationalization and aggressive revenue measures.

The IMF’s new review shows that Pakistan has delivered significant gains since then. Growth recovered to 3 percent last year after shrinking the year before. Inflation fell from over 23 percent to low single digits before rising again after this year’s floods. The current account posted its first surplus in 14 years, helped by stronger remittances and a sharp reduction in imports. And the government delivered a primary budget surplus of 1.3 percent of GDP, a key program requirement. Foreign exchange reserves, which had dropped dangerously low in 2023, rose from US$9.4 billion to US$14.5 billion by June.

“Pakistan’s reform implementation under the EFF arrangement has helped preserve macroeconomic stability in the face of several recent shocks,” IMF Deputy Managing Director Nigel Clarke said in a statement after the Board meeting.

But he warned that Islamabad must “maintain prudent policies” and accelerate reforms needed for private-sector-led and sustainable growth.

The Fund noted that the 2025 monsoon floods, affecting nearly seven million people, damaging housing, livestock and key crops, and displacing more than four million, have set back the recovery. The IMF now expects GDP growth in FY26 to be slightly lower and forecasts inflation to rise to 8–10 percent in the coming months as food prices adjust.

The review warns Pakistan against relaxing monetary or fiscal discipline prematurely. It urges the State Bank to keep policy “appropriately tight,” allow exchange-rate flexibility and improve communication. Islamabad must also continue raising revenues, broadening the tax base and protecting social spending, the Fund said.

Despite the progress, Pakistan’s structural weaknesses remain severe.

Power-sector circular debt stands at about $5.7 billion, and gas-sector arrears have climbed to $11.3 billion despite tariff adjustments. Reform of state-owned enterprises has slowed, including delays in privatizing loss-making electricity distributors and Pakistan International Airlines. Key governance and anti-corruption reforms have also been pushed back.

The IMF welcomed Pakistan’s expansion of its flagship Benazir Income Support Program, which raises cash transfers for low-income families and expands coverage, saying social protection is essential as climate shocks intensify. But it warned that high public debt, about 72 percent of GDP, thin external buffers and climate exposure leave the country vulnerable if reform momentum weakens.

The Fund said Pakistan’s challenge now is to convert short-term stabilization into sustained recovery after years of economic volatility, with its ability to maintain discipline, rather than the size of external financing alone, determining the durability of its gains.