ADB to give $100m in loans for BR\\\'s development

The Asian Development Bank (ADB) will provide US$100 million in loans to the government to help improve the capacity, efficiency and safety of the Bangladesh Railway.

The fund is the third tranche of the $430 million multi-tranche financing facility agreed upon between ADB and Bangladesh government in 2006 to revamp the Bangladesh's entire railways system through the Railway Sector Investment Programme.

The loan will have a 25-year term, including a five-year grace period and an annual interest rate determined in accordance with ADB's London Inter-bank Offered Rate (LIBOR)-based lending facility.

Economic Relations Division (ERD) Secretary Mohammad Mejbahuddin and Country Director for ADB's Bangladesh Resident Mission Mr Kazuhiko Higuchi signed an agreement Wednesday at ERD in Dhaka for confirming the $100 million loan.

Under the programme, ADB has already provided $130 million and $150 million in loans as the first and second tranches respectively for double-tracking the Tongi-Bhairab Bazar section, implementing reforms, rehabilitating yards, extending loops at different stations in the Darshana-Ishwardi-Sirajganj section, and upgrading signalling at 11 stations between Ishwardi and Darshana.

The last tranche will help finance commissioning of 50 broad-gauge passenger carriages and 100 meter-gauge passenger carriages for the railway's main line network.

ADB's Dhaka office said the new carriages will be added to BR's fleet of rolling stock and increase the transport capacity provided by the railway. The new carriages will use the increased line capacity created with ADB assistance provided earlier, and thus improve Railway's position in the passenger market.

The assistance will help increase the number of annual railway passengers by 10 per cent by the year 2017 from 66 million in 2011. By the year 2019, BR is also expected to operate an additional 916 million passenger kilometers per year versus 8,787 million passenger kilometers in 2011, the lender said.

Given Bangladesh's high population density, extreme vulnerability to floods, and scarcity of land, the railway is recognised as an environment-friendly and safe mode of transport for people, bulk freight, and containers, the ADB said.