Of the total amount, ADB is providing $130 million under two agreements while the World Bank $ 40 million in the third agreement.

ERD Secretary Md Aminul Islam Bhuiyan inked the deals for the government of while Country Directors Hua Du and Zhu Xian signed on behalf of ADB and WB at a simple ceremony at ERD's Sher-e-Bangla Nagar office.

Penny Davies of DFID, UK, Masami Tamura of Japanese embassy and Kyoshi Amada of JBIC were, among others, present at the signing ceremony.

ADB Country Director Hua Du said, "As identified in Bangladesh's national poverty reduction strategy (2006), we are committed to supporting the railway sector development as it is critical for accelerating economic growth and poverty reduction, which remains a formidable challenge in spite of the impressive socio-economic progress over the recent years."

She added, "Upgrading the railway network will directly reduce transport costs of Bangladesh's major exports, especially readymade garments."

Zhu Xian, the World Bank country director, said their $ 40 million development-support credit is one of the flagship operations with our Country Assistance Strategy partners.

The donor agency executive further said it will play a "catalytic role for ensuring the success of the reform programme by coordinating with all donors and the wider government ministries and agencies".

The Railway Sector Investment Programme (RSIP) is the first joint initiative of ADB, JBIC and WB, which, together with the DFID, have developed joint strategies to assist Bangladesh in a "more coordinated manner", says a joint release from the funding agencies.

Of the ADB 's $130 million, $100 million will go to support Bangladesh Railway's priority investments and $ 30 million for funding the reform recipe.

The Manila-based Asian development-financing institution's total commitment for the comprehensive RSIP scheme amounts to $ 430 million under the Multi-Financing Facility. The balance of the loan will be made available later, in line with the agreement between the ADB and the government.

The World Bank's $ 40 million will be used to support the government effort to make institutional and governance improvements in Bangladesh Railway, as well as to improve financial management and human resource management, and to increase operational efficiency.

The WB's support will be followed by another proposed development policy credit of $ 60 million for the Railway Reform Programme in 2009. An additional $ 200 million credit is also envisaged in 2009 to support another government initiative to improve infrastructure and network expansion of railway.

Japan's JBIC is also providing an investment loan for the 'Dhaka-Chittagong Corridor'. The DFID is providing technical assistance to the Planning Commission on wider sector governance issues, including the preparation of a 20-year Railway Development Master Plan.

The multi-year, multi-donor railway-sector reform programme will help restructure Bangladesh railway into a "lines of business" organization to improve its commercial and customer focus.

It will also help adopting a modern and transparent financial management system, and better human resource planning and incentives. "A corporatised Bangladesh railway will operate like a business, while remaining fully government-owned," according to the terms of agreements.

The Railway Sector Investment Programme (RSIP) entails a total of $924.5 million, of which ADB will provide $ 430 million, with another $ 250 million coming from the World Bank, $ 100 million from JBIC, and with the balance provided by the government.