$23m ADB for Dhaka to boost regional links

The Asian Development Bank (ADB) has pledged to provide $23 million to Bangladesh as a technical assistance loan for the proposed Sub-regional Transport Project Preparatory Facility, reports UNB. The proposed technical assistance loan will enable the facility to prepare a series of regional cooperation and integration (RCI) transport projects in roads and railways. The facility will focus on priority transport corridors identified in the South Asian Association for Regional Cooperation (SAARC) Regional Multimodal Transport Study, said officials at the resident mission of ADB. Transport corridors linking with the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries--such as the Asian Highway Network and the Trans-Asia Rail Network--will also be selected. The facility will cover 8.0 per cent of Bangladesh's major roads and 12 per cent of its railways. Development of these corridors would complete the sub-regional land transport network, which will stimulate both sub-regional trade and the Bangladesh economy. The facility is projected to cost $27.59 million, including taxes and duties, physical and price contingencies, and interest and other charges during implementation period. The government has requested a loan in various currencies equivalent to $23 million from ADB's concessional Special Funds resources, inclusive $12 million from the sub-regional pool of the ADF, to help finance the facility. The loan will have a 32-year term, including a grace period of 8 years, an interest rate of 1.0 per cent per annum during the grace period and 1.5 per cent per annum thereafter, and be subject to other terms and conditions set forth in the draft loan agreement. The government will provide $4.59 million for local taxes and duties. The facility will increase sub-regional trade among South Asian countries, especially from, to, and through Bangladesh. The facility will improve the implementation efficiency of RCI land transport projects and promote investments to RCI projects by other development partners and the government. In its Roads and Highways Department (RHD) component, capacity development support will improve the RHD's internal control mechanisms, asset management systems, business procedures, and human resource management. The facility aims to prepare at least 300 km for tendering in 2012, and an overall approximate length of 1,700 km by the end of 2013. In principle, all roads will be designed as four-lane, but the final design will depend on the feasibility study, taking into account engineering, economic, social, and environmental viability. Consultants will also explore possible Public-Private-Partnerships for financially viable sub-projects. Under the Bangladesh Railway component, the facility aims to prepare at least one project, or minimum 85 km, for tendering by the end of 2012, based on the following studies: feasibility study and detailed design for two railway line constructions, detailed design for one railway line construction, and feasibility study for three railway bridges and one signaling project.