Govt signs PPP contract for Dhaka Bypass

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DHAKA, Jan 3, 2019 (BSS) – A consortium of Chinese companies-Sichuan Road
and Bridge Group, Shamim Enterprise Ltd., and UDC Construction Limited-has
signed a concession contract with the Government of Bangladesh to upgrade the
Dhaka Bypass under a public-private partnership (PPP) arrangement.

The Asian Development Bank (ADB) acted as financial advisor on the
transaction to the Public-Private Partnership Authority (PPPA) of Bangladesh,
said an ADB press release today.

“This project brings a new dimension to public service delivery in
Bangladesh. It is the first access-controlled expressway in the country,”
said chief executive officer of PPPA Syed Afsor H. Uddin.

“This landmark transaction will pave the way for a pipeline of national
expressways across Bangladesh,” he added.

Head of ADB’s Office of Public-Private Partnership (OPPP) Yoji Morishita
said, “ADB aims to accelerate road development in Bangladesh while minimizing
the financing and operational burden and bringing in a diverse set of
internationally renowned infrastructure developers, operators, and financial
institutions,”

“The Government of Bangladesh establishes the objectives of the
infrastructure as well as some credit supports to tackle the traffic
challenge, while the private sector takes responsibility for meeting the
objectives.

The Dhaka Bypass is the first step in our strategy to bring Bangladesh roads
to the global market based on the PPP model, “he added.

ADB’s OPPP also provided legal support for this transaction and helped
develop a concession contract template for road PPPs through the Asia Pacific
Project Preparation Facility (AP3F), a multi-donor trust fund managed by ADB.

This project marks the first successful collaboration between ADB’s
transaction advisory services and AP3F.

Under the contract signed with the Ministry of Roads and Bridges, a four-
lane tollway and a two-lane service road will be added to the Joydevpur-
Debogram-Bhulta-Madanpur Road (N-105) section of the expressway.

The 48-kilometer (km) project will provide a major arterial connection
between the industrial zone northeast of Dhaka and national highway N1
connecting to the port city of Chattogram, as well as to N2, N3, and N4
highways leading to other major cities.

The consortium will design, build, finance, operate, and maintain the
tolled expressway over a 25-year concession period, and will be able to
charge tolls based on vehicle type.

The Government of Bangladesh will offer viability gap funding of 3.1
billion taka and a minimum revenue guarantee to the consortium to optimize
the cost of financing. The contract also provides the government with a share
of revenues generated by the consortium over a certain threshold.

ADB has been working with the Government of Bangladesh for over 5 years to
transform the country’s roads by making them a bankable asset class
attractive to international investors, as has happened in other sectors such
as the independent power producer sector.

ADB’s OPPP is also the transaction advisor to PPPA on the 13.5-km Rampura-
Amulia-Demra Expressway in Dhaka and in December 2018 was appointed
transaction advisor for the approximately 210-km Dhaka Chattogram Expressway,
the busiest road artery for passenger and freight in the country.

ADB has long supported PPPs and in 2014 established the OPPP to provide
independent transactional advice and develop broader PPP knowledge and
expertise in the region.

ADB has also pioneered the AP3F, a $73 million trust fund supported by the
governments of Japan, Canada, and Australia, to provide project preparation,
project definition, and capacity-building support to governments for PPP
projects.

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