ADB agrees to resume lending for BR

The Asian Development Bank has agreed to release US $150 million for the development of Bangladesh Railway, breaking a two-year deadlock over the fate of a key infrastructure scheme, officials said Saturday. They said the Manila-based development lender announced its decision to release the fund --- the second phase of its $ 430 million loan commitment for railway--- after a meeting with local officials on Thursday. "It's a good news for us. The decision has brought an end to a two-year of deadlock over a key railway project," said a senior official. He said the ADB had tied sweeping reforms in railway sector as precondition to the release of the fund. It committed the fund four years back but delayed disbursement after the government failed to meet its demand. "In 2009 the ADB raised the allegation that the government was not doing anything on railway reform --- one of the seven conditions it asked us to carry out," the official told the FE. The multi-lateral agency signed a $430 million loan deal with the Bangladesh government in 2007 to upgrade the country's railway communications. It disbursed $130 million unconditionally the same year, aimed at making the Bangladesh Railway functional and profitable. The Manila-based agency was supposed to release $150 million in 2008, $100 million in 2009 and $50 million in 2010 as per the agreement, setting timeframe to meet rest of the conditions. Officials said the government has already adopted a new organogram for the BR and outlined its new role and responsibility as part of its effort to reform the loss making state-owned entity. They said after the loan agreement, the government took time to appoint a consultant. The ADB was disappointed when the government "wasted time" to approve the reform package. The consultant proposed to transform the BR into a self-functioning board, trimming its three-tier of functionality to two-tier. The senior official said ADB has already agreed to extend the time period of the project which is to be ended in June this year. He said with the new fund the consultant will now prepare a five-year business plan, improve its accounting system, carry out automation and devise ways to make the loss-making BR profitable.