The Bangladesh Railway (BR) formally announced the commencement of Padma Rail Link project two months after signing a loan deal with China.
The announcement came after meeting all the conditions attached by the Chinese government.
Bangladesh inked a $2.67-billion loan with Chinese Exim Bank for the project on April 27 this year.
It was aimed at building the 225-kilometre rail link on both sides of Padma Bridge.
Officials said 20 per cent of the contract price and land from Mawa to Bhanga has already been handed over to China Railway First Group Co Ltd.
"We've started the project as per schedule. The time count for completing the project began on July 03," said project director Golam Fakhruddin Ahmed Chowdhury.
The BR has already held an inception meeting with the Chinese company. It is likely to get the phase-wise full construction planning soon.
It signed a $3.13-billion commercial contract with the Chinese firm in August 2016 under the government-to-government (G-to-G) arrangement.
However, the overdue loan deal with China delayed the project work for nearly 20 months.
The delay in signing the deal was due to the fixation of size of the loan amount and interest rate.
Under the deal, China will now provide 80 per cent of the project cost under its preferential buyer's credit line.
The rest of the project funds is to be borne by Bangladesh government.
BR officials said terms and conditions of the preferential buyer's credit line are also similar to non-concessional loan or soft loan.
The Tk 350-billion project will establish rail link with nine southern districts.
It will also connect Mongla and Benapole ports through 6.15-kilometre under-construction Padma Bridge.
As per the building agreement, the 225km rail route is scheduled to be constructed by June 2022.
The rail route will be established in four sections-Dhaka-Gendaria, Gendaria-Mawa, Mawa-Bhanga junction via Padma Bridge and Bhanga-Jashore Bridge.
The first phase, which is 50km from Mawa to Bhanga, will be built first to run train through Padma Bridge on the day of its inauguration.
Although the government fixed the target to launch the Padma Bridge by 2018, the rail link project is much behind the schedule.