ADB to provide 430 mln USD to improve Bangladesh's railway system

The Asian Development Bank (ADB) will help improve the efficiency and capacity of Bangladesh's rail transport through a 430-million-U.S. dollars investment program over five years, the local news agency UNB reported Wednesday.

The Railway Sector Investment Program has been developed jointly by ADB, Japan Bank for International Cooperation (JBIC) and the World Bank, together with the Bangladeshi government as a comprehensive package of support for reforms and investments in Bangladesh Railway, said a ADB press release issued in Manila.

The financing represents 46.5 percent of the total fund needed under the Bangladeshi government's seven-year roadmap and investment plan for the railway sector.

The government investment plan, which will cost 924.5 million dollars, is aimed to make the railways more commercially focused, improve governance and accountability, and invest to upgrade infrastructure and rolling stock to overcome capacity bottlenecks.

Over the years, the state-owned Bangladesh Railway has been losing market share and, consequently, losing money and relying more on government budgetary support.

"Efficient transport is essential to achieve higher levels of economic growth needed for sustainable poverty reduction in Bangladesh," Prodyut Dutt, an ADB senior transport specialist, was quoted as saying by the release.

"Greater use of railways will ease the pressure on land since Bangladesh has a very high population density, congested roads and land is scarce," he said.

To be implemented in five loans, the investment program will undertake both capital investments and reforms to ensure that the investments lead to sustainable improvement of Bangladesh Railway's financial and operational performance.

In 2007, a 100-million-dollar loan will help double the capacity of the Tongi-Bhairab Bazar line. Depending on the implementation of agreed reforms, in 2008, a 150-million-dollar loan will finance subprojects in the Dhaka-Chittagong and Dhaka- Darsana-Khulna corridors, where demand for intercity train passenger and freight services is high.

The planned 100-million-dollar and 50-million-dollar loans for 2009 and 2011 respectively for other sections of the railway's main line will again be contingent on agreed reform actions being carried out.

The program's reform component, funded by a 30-million-dollars loan, will focus on helping transform the government-owned Bangladesh Railway into a more commercially oriented organization, the release said.

Source: Xinhua