In a major breakthrough in building the country's first metro rail system in Dhaka, Japan has approved $2.1 billion in soft loan for the $2.7 billion project.
Finance Minister AMA Muhith disclosed this yesterday at his secretariat office after Japanese Ambassador in Dhaka Shiro Sadoshima handed over the approval letter to him.
"Japan government has approved the loan. They will give us $133 million within the current fiscal year," he told journalists.
Construction of the metro rail will begin by June next year and end in 2017, Muhith said
Metro rail will help reduce the perennial traffic congestion in the capital and facilitate quick movement of commuters. Implementation of this project will be a historic step, he said.
Officials of Bangladesh government and Japan International Cooperation Agency (Jica) will start negotiations on the approved loan by the end of this month. They expect an agreement in this regard would be signed next month, communications ministry sources said.
"The government is now ready to start loan negotiation with Jica as both the sides are very sincere about moving fast with building the 20.1 kilometre metro rail starting from Uttara Third Phase to Motijheel," said an official of the ministry.
The project recently gained momentum after a nearly three-year delay over change of route of the metro rail with the government deciding to appoint a consultant to prepare a detailed design of it.
Several international companies short-listed for the job now await approval of Jica. They have been asked to submit their technical and financial proposals for the job of preparing the detailed design and supervising the construction.
Meanwhile, the three-year delay has increased the project cost to $2.7 billion from $1.7 billion.
The metro rail project, the country's second largest infrastructure project next to the $2.9 billion Padma bridge project, became uncertain last year when the proposed rail route was modified for the second time following objections from the air force. The route running across Bijoy Sarani was diverted towards Khamarbari, which irked Jica.
A change in the route was first made in 2010 to avoid overlapping with the under-construction Gulistan-Jatrabari flyover.
Jica, however, did not desert the project and waited for the government to finalise the route, find a place for a depot and form a company that will eventually operate the metro rail.
Earlier, Jica had conducted a study on metro rail. The study said the metro rail will operate every three minutes and carry 60,000 passengers an hour.