ERD officials in Beijing to discuss Exim Bank loan

A delegation of the Economic Relations Division (ERD) is now in China to untie a knot in financing of the costly Padma Bridge rail link project created due to long silence of the Chinese government, officials said.
The US$3.14 billion Padma Bridge Rail Link project has become uncertain following silence of the Chinese Exim Bank over funding the entire cost of the project.
Officials said the move was taken to speed up the process of implementation to meet its target of running train simultaneously on the day of inauguration of the road-cum-rail Padma Bridge in December, 2018.
They said ERD officials in the Chinese desk left for China on Saturday last to negotiate with the Chinese Exim Bank, the financial arm of the Chinese government as it was not responding to the government's request to finance at least 90 per cent of the project cost.
Though the Chinese government assured financing of the project under the government-to-government arrangement, sources, however, said it remained silent due mainly to the size of the project.
They said the Chinese government's concessional and preferential loans cover 100 per cent of the project cost from US$ 300 to $400 million but the Padma Rail Link project cost has crossed $3 billion.
"Now the Chinese government prefers combination of concessional and preferential loans but not the entire cost of the project", said an official preferring not to be named.
The Chinese concessional loan has the scope of being converted into grant but the state-owned bank's preferential loan with interest cannot exceed 85 per cent of the cost when the project cost crosses its ceiling.
Sources said the Bangladesh Railway (BR) submitted a proposal to the bank to provide 90 per cent of the project cost in September last year.
An agreement on the country's first Chinese combined loan was signed for $705 million Karnaphuli tunnel project with $300 million concessional and $ 405 million preferential loans.
Though the government has planned to start implementation of the rail segment of the first-track project to meet its target of bridge inauguration, it has already remained several months behind the schedule due to failure to resolve the crisis.
According to the sources, after getting nod from the Chinese embassy, the BR signed a commercial agreement with an embassy-nominated company after negotiation in August 2016.
The Padma Bridge rail link project aims at establishing rail-based connectivity with nine districts and the capital through the country's longest 6.15 kilometre bridge.
According to the commercial contract, 225km rail routes on both sides of the Padma Bridge will be constructed by June 2022 with trains running through the bridge in 2018.
The route will be established in four sections -- Dhaka-Gendaria route, Gendaria-Mawa, Mawa-Bhanga junction via Padma Bridge and Bhanga-Jessore Bridge.
The third section, which is Mawa-Bhanga junction via Padma Bridge, has been planned to be completed by 2018 to run trains over the bridge on the inaugural day.
smunima@yahoo.com