The Asian Development Bank (ADB) board of directors has approved US$1.2 billion in finance for the second phase upgradation of the Dhaka-Northwest international trade corridor in Bangladesh, according to a news release issued by ADB on Tuesday.
"Bangladesh has good prospects of becoming a regional trade hub, if the country's transport infrastructure can be improved to bring down transport costs and to make the sector more competitive," the release said, quoting Unit Head of Project Administration in ADB's South Asia Department Dong Kyu Lee.
"To further these aims, the project is expected to significantly boost trade and prosperity along the trade corridor route, the second busiest artery in the country," Dong Kyu Lee was also quoted as saying.
Transport infrastructure is the centrepiece of the ADB-supported South Asia Sub-regional Economic Cooperation (SASEC) programme, which promotes regional prosperity, according to the ADB press statement.
Since 2001, the SASEC members have invested more than $9.17 billion in the projects with a regional dimension, including 31 transport projects worth $7.3 billion.
SASEC transport investments in Bangladesh focus on developing highway corridors. Road travel accounted for 70 per cent of all passenger traffic and 60 per cent of freight in Bangladesh, where traffic had been growing at a rate of 8.0 per cent annually, it mentioned.
ADB has been a partner of the government in improving the Dhaka-Northwest corridor since 1994, when the landmark Jamuna Bridge Project was approved, according to the statement.
First ADB loan of $198 million was approved in 2012 for what is now considered phase-one of the international corridor project. It increased capacity on 70 kilometres (km) of the Joydeypur-Elenga section of the road.
It also improved operational efficiency of two of the land-ports - Burimari and Benapole - that provide gateways to Bhutan and India respectively, it stated.
Phase-two continues ADB's support to the corridor by improving the 190-km section from Elenga to Rangpur through Hatikumrul.
Besides, road operation and management in the Roads and Highway Department (RHD) will also be strengthened under the project, it further said.
There will be further work on issues such as road safety and gender-responsive features to make the highway user-friendly to women.
Referring to studies that show that women particularly use the route on foot or slow-moving vehicles, such as rickshaws, it said the project will include footbridges, footpaths, and lanes for the slow-moving vehicles to make their travel safer. The total cost of the project is $1.67 billion, of which the government will provide $472.6 million, said the ADB statement.
ADB's financial assistance will be delivered through a multi-tranche financing facility, with the first tranche comprising a regular loan of $250 million and a concessional loan of $50 million.
Its work will be carried out over 10 years to August 2027, with funding from three more tranches from the facility at intervals. Accompanying the assistance package is an ADB technical assistance (TA) grant of $2.0 million to support the government in updating its Road Master Plan, and enhancing planning and monitoring activities associated with roads.
The TA will be carried out from January 2018 to December 2023, it mentioned.
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