The Asian Development Bank is set to approve $1 billion at the end of this week for a project to lay a 102km rail track from Dohazari in Chittagong to Cox's Bazar -- the lender's highest allocation for a single project in Bangladesh.

Until now, the ADB's highest allocation for a single project is $700 million; the project was in the power sector.

Ecnec has already approved a project to lay a 129km of rail track from Dohazari to Gundum near the Myanmar border via Cox's Bazar at a cost of Tk 18,034 crore or about $2.28 billion. Of the total cost, the ADB will provide Tk 13,115 crore or about $1.66 billion.

However, the ADB will approve $1 billion for the first phase of the entire project.

In the second phase, the Manila-based multilateral lender will provide funds for expanding the rail-line to Gundum and deep-sea port at Matarbari, according to the ADB preliminary document.

To get the ADB funds, Bangladesh will have to upgrade the 47km rail line from Chittagong city to Dohazari and construct a rail bridge on the Karnaphuli river. The government will improve the rail line with its own funds, according to the ADB document.

South Korea plans to bankroll the road upgrade and the rail bridge construction over the Karnaphuli river, according to the document.

The ADB also said the project design includes provisions for future capacity enhancement, and extensions of the line to Gundum at the Myanmar border and to the planned deep-sea port on Matarbari Island.

These future extensions are expected to be financed under phase 2 of the proposed project, it said.

A finance ministry official said the government also sought Chinese assistance for implementing the project and China showed interest.

But due to procedural delays, the government has decided to implement the project with ADB funds.

The government set a target to complete the whole project by 2022, which would connect Bangladesh with the Trans-Asian Railway, a network across Europe and Asia, and boost the country's trade with Myanmar, China and Thailand.

The ADB document said the project will connect Cox's Bazar district for the first time to the national and sub-regional railway network, and support efficient development in the Dhaka-Chittagong-Cox's Bazar-Myanmar border corridor through railway connectivity.

The project will improve connectivity towards Myanmar by intermodal facilities for passengers and freight transferring to road transport toward the Myanmar border.

The ADB said the project will be constructed on dual-gauge tracks to enable future direct connectivity toward western Bangladesh and India, where railways are constructed mostly in broad gauge, as well as toward north-eastern India and Southeast Asia, where railways are mostly constructed in metre gauge.

Cox's Bazar is being developed to become a major domestic and regional tourist destination.

Tourism in Cox's Bazar is expected to grow by at least 5 percent annually and the government intends to develop the district into a regional tourist hub and seaside resort, and other areas of the district and the Chittagong Hill Tracts into eco-tourist destinations.

The document said developing tourism in Cox's Bazar is expected to contribute significantly to the district's economic growth and create jobs in tourism and supporting industries.

But tourists can travel to the district only by road via the two-lane national highway or on a very limited scale by air; most tourists use the bus and come from Bangladesh's urban centres, such as Dhaka, Comilla and Chittagong, ADB said.

It mentioned that each year, around 1.88 million tourists visit Cox's Bazar and stay in the district's more than 200 hotels and numerous guesthouses and dormitories.

Annually, more than nine million bus trips are made to the district from Chittagong alone. It is expected that the railway will serve as an alternative mode of transport for about 50 percent of the trips currently made with buses.

Through this modal shift from road to rail, the project will help reduce greenhouse gas emissions and improve road safety. Special tourist trains will be operated between Dhaka and Cox's Bazar to accommodate the demand, ADB said.