The government has inked a US$505 million loan deal with the Asian Development Bank (ADB) to develop the country's main Dhaka-Chittagong railway corridor with second railway track for boosting national and sub-regional trade.
Officials said some 72-kilometre long dual gauge double line will be constructed in parallel to the existing line from Akhaura to Laksam with the ADB fund under a sub-regional cooperation project as the corridor will eventually be a part of the Trans-Asia Railway Network.
They said the ADB has been assisting the government to upgrade the railway corridor from Tongi to Cox's Bazar except a part with the assurance of $4.8 billion to meet the requirements of the sub-regional railway network.
Senior Secretary of Economic Relations Division (ERD) Mohammad Mejbahuddin and Country Director of Bangladesh Resident Mission of ADB Kazuhiko Higuchi signed the agreement on behalf of the respective sides at a ceremony at ERD on Sunday.
Of the loan, $ 400 million is Ordinary Capital Resources (OCR) and $ 105 million is Asian Development Fund (ADF) which will bear almost 60 per cent of the cost of the $837.13 million South Asian Sub-regional Economic Cooperation (SASEC) Railway Connectivity: Akhaura-Laksam Double Track Project.
Speaking on the occasion, the ADB country director said the project will also help improve the overall railway transport system in Bangladesh with the aim to reduce transport costs and improve logistics of strategic corridors for sub-regional trade.
He said the railway is very environment-friendly for both passengers and freight transports and lauded the government for taking efforts on the reform of the Bangladesh Railway.
"The assistance will help railways better serve needs of people and movement of goods and help improve domestic and sub-regional trade," Mr Higuchi added.
The ERD senior secretary urged the railway authority to expedite the process of implementation of the project as deal signing is only a start of the process and said the delay in implementation affects the project cost and loan disbursement process.
Under the project, 11 railway stations will be reconstructed with special facilities for the elderly, women, children, and the disabled. The project will also support capacity building for the permanent project management unit to be established in Bangladesh Railway and for accessing climate mitigation funding.
The project endorsed by the SASEC Trade Facilitation and Transport Working Group in a meeting held in Singapore on October 30, 2013 is expected to be completed by 2022.
OCR of the ADB is London Inter-bank offered rate (LIOB) based loan repayable in 25 years including five years' grace period. ADF of the ADB is a concessional loan repayable in 25 years including five years' grace period at the interest rate of 2.0 per cent.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth and regional integration. Established in 1966, it is owned by 67 members - 48 from the region. In 2014, ADB assistance totalled $22.9 billion, including co-financing of $9.2 billion.
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