Chinese company gets $3.33b deal
China will construct a rail route between Dhaka and Jessore through the Padma bridge, cutting travel time significantly and boosting national and regional connectivity.
The cabinet committee on economic affairs yesterday approved a proposal from the railway ministry to give the job to China Railway Group Ltd.
The 215-kilometre rail network will link the capital for the first time with Jessore at a cost of $3.33 billion. The new route will also directly connect Dhaka to Khulna, Benapole and Mongla.
Another proposal was approved to appoint the Bangladesh Army as consultant to facilitate the land acquisition process on speedy basis and oversee the work on the rail project.
The prime minister has instructed the departments concerned to get the railway network completed by the day the government opens the Padma bridge to the public, according to the proposal.
The rail route, aimed to connect Dhaka with the south-western part of the country within the shortest possible time, will run beneath the bridge expected to be ready by 2018.
The network will be set up in two phases: first, Dhaka to Maowa to Bhanga at $2.18 billion and second, Bhanga to Jessore at $1.14 billion.
The government is constructing the Padma bridge on its own fund.
However, it has consulted the Chinese company over the financing of the rail route a number of times.
The Chinese government has agreed to provide a major portion of the estimated cost to Bangladesh in loan with 2 percent interest rate, which will have to be repaid in 20 years and a grace period of five years.
Both sides have already finalised the terms of negotiation.
The report of the negotiation committee will now be vetted by an independent third party consultant. The work to appoint the consultant is underway, according to the proposal.
As many as 1,644 acres of land has to be acquired in eight districts including Dhaka, Munshiganj, Narayanganj, Madaripur, Shariatpur and Faridpur for the rail network.
Once completed, the new rail route will shorten the travel distance of Dhaka-Jessore, Dhaka-Khulna and Dhaka-Darsana by 184.72 kilometres, 212.05 kilometres and 44.24 kilometres.
“The rail link will become a vital corridor in terms of national as well as regional railway traffic,” the railway ministry said in the proposal.