FE Today Logo

Padma rail-link project

Govt okays $2.67b Chinese hard loan

FHM Humayan Kabir | March 30, 2018 00:00:00

The construction work of Padma Bridge railway link is going to start this year, as the government approved US$ 2.67 billion Chinese hard loan for the project on Thursday, officials said.

Economic Relations Division (ERD) officials said the non-concessional loan committee, headed by Finance Minister A M A Muhith, approved the loan that will be utilised to construct the railway line.

"The committee approved the loan on Thursday, and the loan deal is expected to be signed by next month (April). The construction work will begin shortly," ERD Additional Secretary Farida Nasreen told the FE.

The country's single largest Padma Bridge rail-link project was approved by the government nearly two years ago at a cost of Tk 349.90 billion. Its construction work was scheduled to start from January 2016.

The state-owned Bangladesh Railway (BR) signed a commercial contract with China Railway Group in August 2016 for starting the construction of 172-km railway line from Dhaka to Jessore through Padma Bridge.

The project was taken to establish direct rail-link between Dhaka and the country's southern parts, particularly the Mongla sea-port and the Benapole land-port.

However, the Chinese government adopted a 'silent mode' over the years on its assured $2.67 billion loan. It was not responding to the Bangladesh government's repeated requests for confirming the loan.

"The Chinese highest policymaking body - State Council - has endorsed the loan for the Padma rail-link project nearly a month ago. So, Beijing is now ready to sign the loan agreement," a senior ERD official said.

The ERD officials said the Chinese loan will have to be repaid in 20 years with 2.0 per cent fixed interest rate. Besides, 0.25 per cent management fee and 0.25 per cent commitment fee are applicable for the single largest loan from China. Chinese government will bankroll the major portion of the railway link project through G-to-G (government to government) system.

Bangladesh government had a plan to launch the railway transportation system through Padma Bridge, when it will be operative. Besides the 172-km single railway line, it will also build 43.2 km loop lines and 23.37 km viaduct on it.

According to the project proposal, Padma rail-link project will be completed by 2022, and a part of it is planned to be finished by this December.

BR will acquire nearly 1,800 acres of land for setting up the single-track railway track, which is designed for a maximum speed of 120 km/hour.

[email protected]

Share if you like