Dhaka, Bangladesh (BBN)– The government has approved a US$796 million loan from China Development Bank (CDB) for building the Dhaka Elevated Expressway (DEE) to help ease the traffic troubles on the city roads, officials said.

The Italian-Thai Development PLC has formed a company locally, named, the First Dhaka Elevated Expressway Company Ltd that has already been registered with the Registrar of Joint Stock Companies and Firms and the Board of Investment.

The loan was approved at a meeting of the scrutiny committee for approval of foreign loans or supplier’s credits, held in the central bank headquarters in Dhaka on June 15 with its chairman and Bangladesh Bank Governor Dr Atiur Rahman in the chair.

Talking to BBN, a senior official said the effective interest rate will be below 5.0 per cent on the 15-year-term foreign-currency loan. “Disbursement of the loan will start after the signing of the contract.”

Under the existing provisions, a contract will be signed between the CDB and the Italian-Thai Development PLC, the concessionaire of the project.

“We expect that such loan will help in implementation of the DEE, the country’s first Public-Private Partnership (PPP) project in road- infrastructure sector,” another official said.

Besides, three local banks — Sonali Bank, BRAC Bank and Modhumati Bank — have also expressed their willingness to invest a total of BDT 10 billion for implementation of the US$1.25 billion DEE project.

Bangladesh Bridges Authority (BBA) and the Italian-Thai Development PLC signed an agreement for the second time on December 13, 2013 after the first agreement struck in January 2011 became obsolete due to change of the project’s alignment.

Bangladesh government had set targets to start construction of the 26-kilometre expressway since its initiation on various occasions, but it could not do so for reasons like failure to hand over land to the concessionaire and the failure of the private sector partner to mobilise funds.

The BBA is now working to hand over the land for the expressway route from Hazrat Shahjalal International Airport to Banani to the concessionaire by July this year, a senior official of the BBA said.

The DEE would be constructed from Hazrat Shahjalal International Airport to Shanir Akhra on the Dhaka-Chittagong highway with five connecting points to pick and drop traffic.