The Asian Development Bank (ADB) yesterday approved $1.2 billion for the second phase of upgradation of the Dhaka-Northwest international trade corridor in Bangladesh.
“Bangladesh has good prospects of becoming a regional trade hub, if the country's transport infrastructure can be improved to bring down transport costs and make the sector more competitive,” said Dong Kyu Lee, unit head of project administration in ADB's South Asia Department.
“To further these aims, the project is expected to significantly boost trade and prosperity along the trade corridor route, the second busiest artery in the country.”
In the second phase, the 190-km section from Elenga through Hatikurul to Rangpur will be improved.
Road operation and management in the roads and highway department will also be strengthened, the Manila-based donor said in a statement. It also said there would be further work on issues such as road safety and gender responsive features to make the highway user-friendly to women.
Studies have shown that women particularly use the route on foot or slow-moving vehicles such as rickshaws, so the project will include footbridges, footpaths and lanes for slow moving traffic to make their travel safer, ADB said.
The total cost of the project is $1.67 billion, of which the government will meet $472.6 million.
ADB's financial assistance will be delivered through a multi-tranche financing facility, with the first tranche comprising a regular loan of $250 million and a concessional loan of $50 million.
The work will be carried out over 10 years till August 2027, with funding from three more tranches from the facility at intervals, ADB said.
The assistance package will be accompanied by an ADB technical assistance (TA) grant of $2 million to support the government in updating its Road Master Plan and enhancing, planning and monitoring activities associated with roads.
The TA is to be carried out from January 2018 to December 2023.
ADB has been a partner of the government in improving the Dhaka-Northwest corridor since 1994, when the landmark Jamuna Bridge Project was approved.
The first ADB loan of $198 million was approved in 2012, what is now considered the phase one of the international corridor project.
This increased road capacity on 70 kilometres of the Joydebpur-Elenga section of the road. It also improved operational efficiency of two of the land ports—Burimari and Benapole—that provide gateways to Bhutan and India respectively, said ADB.
Transport infrastructure is the centrepiece of the ADB-supported South Asia Subregional Economic Cooperation programme, which promotes regional prosperity, it added.