DHAKA, July 31, 2018 (BSS) – The government and the Asian Development
Bank (ADB) today signed agreements for US$ 360 million in loans to buy modern
rolling stock and support reform in Bangladesh Railway.
The Manila-based lending agency signed two agreements in this regard with
the government of Bangladesh at the Economic Relations Division (ERD) in the
city’s Sher-e-Bangla Nagar area for funding a project titled, ‘Railway
Rolling Stock Operations Improvement Project’.
ERD Secretary Kazi Shofiqul Azam and ADB Country Director for Bangladesh
Resident Mission Manmohan Parkash signed the deals on behalf of their
respective sides.
After signing the agreement, Azam said: “ADB is our trusted partner and
our relationship is growing”.
He informed that the foreign aid disbursement target in the current
fiscal is around US$ 7.5 billion, including a large amount from ADB. “I
think, this target is achievable, not ambitious one,” he added.
“We are supporting the government’s initiative under its 7th Five Year
Plan for increasing the market share of railway freight transport from 4
percent to 15 percent and passenger movements from 4 percent to 10 percent by
2020,” Parkash said.
Out of the total amount, ADB will provide US$ 354 million loan as
Ordinary Capital Resources (OCR) while the rest US$ 6 million loan will come
as Concessional OCR Lending (COL).
The project will contribute to increasing the railway’s share in the
country’s communication system as the railway is the core mode of the
country’s transportation system.
The rolling stock will introduce auxiliary power units (APU) to
Bangladesh Railway to significantly reduce diesel consumption when the
locomotives are idling.
The project will also draw up investment plans for urgently required
maintenance facilities, establish training programmes for the drivers, and
run the enterprise-wide IT system.
The total cost of the project is US$ 453.37 million, of which US$ 93.37
will be met by the government. The project is due for completion at the end
of June 2022.
Accompanying the loans, there will be a technical assistance grant of US$
500,000 to devise a training scheme for drivers in the use of the APU and
recommend potential approaches to achieve the overall energy efficiency.
ADB will administer the grant, to be provided by the Asian Clean Energy
Fund under the Clean Energy Financing Partnership Facility, established by
the Japan government.
Under its Seventh Five-Year Plan for fiscal years 2016-2020, the
government has put special emphasis on railway development, setting targets
to increase the market share to 15 percent in freight transport and 10
percent in passenger movements by 2020.
Under the railway reform supported by ADB, the government has taken steps
to boost revenue by raising the level of passengers and freight tariffs that
have remained unchanged for decades.
An increase in the operational capacity through new rolling stock is needed
to generate more revenue.