ADB sets Dec deadline for BR reforms

The Asian Development Bank (ADB) has set next December as the deadline for the Bangladesh Railway (BR) to complete the process of train fare adjustment and corporatisation of container services for getting its pledged fund.
Besides, the ADB also hinted that its future funding for the railway sector would depend on the government's response in this regard.
Official sources said the ADB's decision came during the wrap-up meeting held between an ADB mission, and the Economic Relations Division and the BR on Thursday.
The ADB mission sat with the Ministry of Railway and the BR to review the progress of its railway sector investment programme under which commitment of US$ 430 million loan was made in 2007.
Tariff reform policy and corporatisation of the container service were the two prime requirements of the bank to release $50 million, the last and fourth tranche of the loan committed to reform the BR
Sources said though the BR has completed necessary paper works on tariff system reform and corporatisation of container service by formulating policies, the mission demanded approval of those policies by December.
"It will be time-consuming to complete approval procedures of both the reforms," said an official preferring not to be named.
He said tariff reform is to introduce a mechanism of yearly adjustment of train fares of all BR services and corporatisation of container services is to form a private company to operate the services.  
The BR has completed the draft 'tariff reform policy' and formulated a policy of corporatisation of the container service but these need vetting of the policy, clearance of the Ministry of Finance and so on to complete the approval process.
However, another source said the government is not considering to reform both tariff and container service at this moment as the BR is yet to develop its infrastructure facilities for operating its existing services efficiently.
The source pointed out that only five per cent of the container services operating to and from the Chittagong Port is being operated by the BR and the existing rail track cannot even operate the BR's present container services efficiently.
The tariff policy has been recommended to introduce a mechanism for automatic adjustment of train fares every year to minimise the sector's huge losses by reducing the gap between operational costs and earnings from fares.
Corporatisation of container business aims at improving efficiency and increasing capacity of container services of railway under a state-owned company.
Earlier, the ADB refrained from releasing its funds on several occasions on grounds of corruption and irregularities. In the first tranche, the ADB released $100 million to carry out the work of Tongi-Bhairab Bazar double track, improve the signalling system on Dhaka-Chittagong railway line and for consultancy purposes of the reform project.
Several other projects were taken for guideline of the ADB to get the next two tranches.
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