China has confirmed US $2.67 billion in loan for Bangladesh's second-largest Padma railway link project, officials said.
The confirmation came after Bangladesh and China signed an agreement in Beijing, giving new life to the struggling railway link project, which has been languishing since early 2016, they said.
Additional secretary of the Economic Relations Division (ERD) Md. Zahidul Haque and China EXIM Bank Vice President Sun Ping signed the loan agreement on Friday, AHM Jahangir, Economic Counsellor of Bangladesh Embassy in Beijing, told the FE.
A seven-member Bangladesh delegation, led by Mr Haque, is now in China for signing the deal.
The US$ 4.31 billion (Tk 349.88 billion) Padma Bridge railway link project is one of Bangladesh's top priority projects placed under the 10 "fast-track" ones.
Out of the $ 4.31 billion, the Chinese EXIM bank will provide $ 2.67 billion loans while the Bangladesh government will give the remaining amount.
The Executive Committee of the National Economic Council (ECNEC) in early 2016 approved the Tk 349.88 billion project.
The government had a plan to start operation of the single line dual-gauge railway line from Dhaka-Padma Bridge-Bhanga-Jessore as soon as possible as it wants to complete building of the under-construction Padma Bridge by 2019.
The Bangladesh Railway, the project executing agency, signed a commercial contract with a Chinese company -China Railway Engineering Corporation (CREC) in August 2016 for starting the construction work of the 172 kilometre-railway line from Dhaka to Jessore crossing through the Padma Bridge.
Despite repeated requests from the government, China had shown tepid response to sign $ 2.67 billion loan agreement.
The Chinese highest policymaking body-State Council-endorsed the loan for the Bangladesh's Padma rail link project about two months ago, a senior ERD official said.
The government had a plan to start the railway transportation system through the Padma Bridge, which is being constructed to connect the country's impoverished south-western region with the central part of Dhaka when it will be operative.
The Chinese government would bankroll the major portion of the Tk 349.90 billion railway link project through the G-to-G (government to government) arrangement.
The government would lay 172km single railway line from Dhaka to Jessore through Padam Bridge and Bhanga of Faridpur to connect the south-western region.
Besides, it will build 43.2km loop lines and 23.37km viaduct on the proposed railway line.
According to the project proposal, the railway authorities will acquire nearly 1,800 acres of land for setting up the railway track.
ERD officials said the $ 2.67 billion Chinese loan will be repaid in 20 years with 2.0 per cent fixed interest rate.
Besides, 0.25 per cent management fee and 0.25 per cent commitment fee are applicable to the single largest loan from China, they said.
According to the project proposal, the Padma rail link project is scheduled to be completed by 2022, and a portion of it was to be completed by December this year.
The single-track line is being designed for a maximum speed of 120 km/hour.
The project will connect the Padma Bridge and will enable a direct rail link between Dhaka and the southern parts of Bangladesh, especially the Mongla sea port and the Benapole land port.
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