Dhaka, Bangladesh (BBN) – A consortium of companies from China has signed a concession contract with Bangladesh government 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.
The companies are Sichuan Road and Bridge Group, Shamim Enterprise Ltd., and UDC Construction Limited included in the consortium.
“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.”
“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,” said the Head of ADB’s Office of Public–Private Partnership (OPPP) Yoji Morishita.
“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.”
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.
The 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.