Dhaka, Bangladesh (BBN) – The Asian Development Bank (ADB) and the Bangladesh Government on Monday signed an agreement for $150 million in loans to help improve capacity, efficiency and safety of railway systems in Bangladesh,officials said.
Iqbal Mahmood, Senior Secretary, Economic Relations Division (ERD) and M. Teresa Kho, Country Director of ADB’s Bangladesh Resident Mission, signed the agreement on behalf of Bangladesh and ADB respectively, at a ceremony at ERD, Sher-e-Bangla Nagar in the capital Dhaka.
The assistance will help to complete double-tracking of the 64 kilometer of railway lines between Tongi and Bhairab Bazar; improve signaling system of 11 stations in Darshana-Ishurdi section; and rehabilitate yards and extend loops in the Darshana-Ishurdi-Sirajganj Bazar section.
“The reforms and infrastructural development to be accomplished will help increase container transportation by 10%, and raise number of daily trains in Tongi-Bhairab bazaar section by 25 percent until 2020,” said M. Teresa Kho, Country Director for ADB. “The improvement will result in low operating costs for users and increasing the competitiveness of Bangladesh for investment,” the Country Director added.
The assistance forms part of a $430 million multi tranche financing facility agreed between ADB and the government in 2006 to revamp the entire railways system. Under the arrangement, ADB has already provided $130 million for double-tracking the Tongi Bhairab Bazar section, and implementing reforms.
Upgrading the railway network will directly reduce transport costs for Bangladesh’s major exports, especially ready-made garments. The improved railway system will ease the pressure on the road network, which is congested, and thus benefit transport sector as a whole.
It will also help promote regional trade and investment by improving a cost-effective communication network.
The railway sector development is critical for accelerating economic growth and poverty reduction, which remains a formidable challenge in spite of the impressive economic and social progress over the recent years. Given Bangladesh’s high population density, extreme vulnerability to floods, and scarcity of land, the railway is recognized as an environment-friendly mode of transport in mass transit of people, bulk freight and movement of containers.
BBN/SSR/AD-27Aug12-4:50 pm (BST)