The Railway Ministry now mulls over fresh foreign funds for the Khulna-Darshana railway-line project after dropping it out from the Indian Line of Credit (LoC), officials said on Wednesday.
The Planning Commission (PC) at its recent Project Evaluation Committee (PEC) meeting has recommended implementing the project continuing with foreign funds, according to them.
"We've requested the Economic Relations Division (ERD) to search for foreign assistance from other external sources for installing the Tk 35.07-billion Khulna-Darshana railway line," a senior PC official said.
The Ministry of Railway (MoR) takes the initiative to secure alternative external financing for the 126.25km Khulna-Darshana double-track railway project following the decision of delisting it from the Indian LoC, Chief Planning Officer of the Bangladesh Railway Muhammad Kudrot-E-Khuda said.Earlier, the immediate past interim government had decided to scrap the project, struggling for implementation delays over the last eight years since January 2018.
The Bangladesh Railway (BR) undertook the project in January 2018 at a cost of Tk 35.07 billion with the support of Indian LoC to install a double line railway track by December 2022.
But the BR allegedly failed to start the project's main work and the project tenure was extended twice up to December 2025.
According to the BR, it has been able to spend only 0.64 per cent of the project funds due to the complex terms and conditions under the Indian LoC.
"When the MoR sent us the project for delisting from the Annual Development Programme, declaring it complete without implementation as per the existing provision, the PEC decided to continue it after getting alternative funds. This project is important for the country," said another senior PC official.
The fresh move marks a significant shift in the project's trajectory, which has been stalled for years under the second Indian LoC due to prolonged approval processes, stringent loan conditions, contractor inaction, officials said.
Besides, mandatory requirements to source 65-75 per cent of goods and services from Indian territory were among the biggest problems for the BR, which, according to officials, contributed to cost escalations.
After the political transitions in August 2024, the Indian contractors were either reluctant to proceed with the Khulna-Darshana railway line or leave the project site.
The Khulna-Darshana project was designed to upgrade the existing single broad-gauge track into a double-track system. It is a crucial line for regional connectivity, which aims to boost trade and also facilitate efficient freight movement between Mongla Port and neighboring India, Nepal, and Bhutan, enhancing train-movement capacity for both passenger and freight services in the western zone.
However, due to years of delay, the projected cost ballooned. Recent estimates suggest an increase of at least Tk 20 billion, bringing the total requirement to approximately Tk 55 billion.
While India has reportedly expressed a desire to withdraw from the project along with two other major rail projects -- the Bogura-Sirajganj line and Parbatipur-Kaunia gauge conversion -- the Bangladesh government remains committed to their implementations.
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