Try #1659:

Author: iohk-bors[bot]

overlays/haskell.nix

@@ -211,37 +211,38 @@ final: prev: {
               # dotCabalName anyway.
               dotCabalName = "dot-cabal-" + allNames;
               # This is very big, and cheap to build: prefer building it locally
-              tarballRepos = final.runCommand dotCabalName { nativeBuildInputs = [ cabal-install ]; preferLocalBuild = true; } ''
+              tarballRepoFor = name: index: final.runCommand "tarballRepo_${name}" {
+                nativeBuildInputs = [ cabal-install ];
+              } ''
+                set -xe
+
                 mkdir -p $out/.cabal
                 cat <<EOF > $out/.cabal/config
-                ${final.lib.concatStrings (
-                  final.lib.mapAttrsToList (name: index:
-                ''
                 repository ${name}
                   url: file:${mkLocalHackageRepo { inherit name index; }}
                   secure: True
                   root-keys:
                   key-threshold: 0
 
-                '') allTarballs
-                )}
                 EOF
 
                 # All repositories must be mkdir'ed before calling new-update on any repo,
                 # otherwise it fails.
-                ${final.lib.concatStrings (map (name: ''
-                  mkdir -p $out/.cabal/packages/${name}
-                '') (builtins.attrNames allTarballs))}
+                mkdir -p $out/.cabal/packages/${name}
 
-                ${final.lib.concatStrings (map (name: ''
-                  HOME=$out cabal new-update ${name}
-                '') (builtins.attrNames allTarballs))}
+                HOME=$out cabal new-update ${name}
               '';
+              f = name: index:
+                let x = tarballRepoFor name index; in
+                ''
+                  ln -s ${x}/.cabal/packages/${name} $out/.cabal/packages/${name}
+                  cat ${x}/.cabal/config >> $out/.cabal/config
+                '';
             in
               # Add the extra-hackage-repos where we have all the files needed.
               final.runCommand dotCabalName { nativeBuildInputs = [ final.xorg.lndir ]; } ''
-                mkdir $out
-                lndir ${tarballRepos} $out
+                mkdir -p $out/.cabal/packages
+                ${builtins.concatStringsSep "\n" (final.lib.mapAttrsToList f allTarballs)}
 
                 ${final.lib.concatStrings (final.lib.mapAttrsToList (name: repo: ''
                   mkdir -p $out/.cabal/packages/${name}