Bangladesh policy shifts to seek Chinese loan

Shifting from its earlier stand on self-funding, Bangladesh has decided to seek a Chinese loan to widen the Dhaka-Sylhet-Tamabil corridor into four lanes.
Sources said road transport and bridges ministry requested the economic relations division (ERD) to ask for the Chinese government's funds for the project.
This time, they said, Bangladesh would propose the government-to-government arrangement under a limited tender method, not a direct method, of picking a contractor.
China earlier agreed to fund the Tk 130-billion project, among 27 others. The deals of which were done during Xi Jinping's Dhaka visit in October 2016.
The Roads and Highways Department (RHD) signed a memorandum of understanding (MoU) with the China Harbor Engineering Company Limited (CHEC) on October 09, 2016.
The project was shown to be implemented under a direct procurement method (DPM).
The DPM is a method of signing a contract with a single contractor nominated by the financier.
But the RHD failed to negotiate with the CHEC in 2017 as it had proposed an exorbitant cost to implement the 226-kilometre road.
The company proposed Tk 170 billion which was more than the RHD's estimated cost.
Later, the government decided to implement the project with its own fund, but that too was cancelled for not getting the Planning Commission's approval.
It showed inadequate funds as the reason for not implementing the mega project.
Sources said the fresh decision to look for funds from China had been made in consultation with the finance ministry as the 2016 MoU is still valid.
According to officials, Prime Minister Sheikh Hasina agreed on the decision but asked the ministry to execute the project under the limited procurement method.
Since the MoU with CHEC was cancelled, they said, the ministry continued to receive interest from different Chinese companies to work on the project.
"We're continuously receiving interest from Chinese companies for the project. So, we decided to go for Chinese funds," said a ministry official.
He said as per the PM's directive, the ERD would request China to name some Chinese companies that would compete for the work.
Sources said the ministry also sought Asian Development Bank finances as it provided support to do feasibility study and detailed design on the corridor being a part of Asian Highway.
The project was in the ADB's pipeline in 2015 to be funded in 2019, but it dropped the scheme after the government had signed an MoU with the CHEC in 2016.
The RHD estimated Tk 126.65 billion as the project cost after rescheduling its construction rate in 2015.
The initial cost after feasibility study and detailed design was estimated at Tk 91.84 billion.
The cost was estimated for the construction of 286 kilometres of Dhaka-Sylhet highway leading to Tamabil that will serve as a regional corridor linked with the Indian state of Meghalaya.
The RHD has another scheme to acquire land for the project at Tk 38.16 billion approved by the Executive Committee for the National Economic Council in October 2018.
It prepared the proposal of the Dhaka-Sylhet four-lane highway project to build additional four lanes from Kanchpur Bridge to Humayun Rashid Square in Sylhet.
As it was hanging in the balance over funding, the project is already one year behind the target of starting implementation work.

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