Pakistani Prime Minister Yousuf Raza Gilani on Friday inaugurated the country's first luxury train in the eastern city of Lahore.
The Business Express will run between Lahore and Karachi cities.
It is the first non-stop train to run between the provinces of Punjab and Sindh.
The train successfully completed its trial run Jan 26.
Pakistan Railways and Four Brothers International Pvt Ltd, a Karachi-based investor, will jointly operate it, Xinhau reported.
As per the agreement between the two sides, the private company will invest $2.51 million for passenger services like ticketing, luggage care, bedding and food service.
It will pay over $11 million per annum to the railways.
The agreement will be valid for five years and can be extended for another term with the consent of both parties.
The state-owned Pakistan Railways had been faced with a worst crisis during the last four years and most of its trains were suspended due to financial crisis.
State-run trains were the cheapest medium of transportation in the country.