China-funded roads get green light | The Daily Star
12:00 AM, September 22, 2016 / LAST MODIFIED: 12:00 AM, September 22, 2016

China-funded roads get green light

The cabinet committee on economic affairs yesterday approved the Roads and Highways Department's proposals allowing China Harbour Engineering Company to build two mega-roads for about Tk 38,000 crore.

The projects will be carried out with Chinese soft loans and without any competitive bidding.

One of the projects involves expanding the 226km Dhaka-Sylhet road to a four-lane highway.

Some Tk 12,665 crore has been earmarked for the project, but the proposal says the cost may go up 35 percent in the final estimate.

The Roads and Highways Department last year signed a non-binding preliminary agreement with China Harbour, under which a feasibility study and a detailed design have been prepared.

Finance Minister AMA Muhith himself is interested about the project and has written several times to the Chinese government about it. Yesterday's cabinet committee meeting was chaired by Muhith.

China Harbour has been selected for implementation of another project, which includes construction of a marine drive and a 160km four-lane expressway and land reclamation from Sitakunda to Cox's Bazar.

The preliminary cost of the project has been estimated at Tk 25,573 crore. After detailed appraisal, the cost may shoot up.

A non-binding preliminary agreement was signed last year for this as well.

Kolatoli-Inani-Shilkhali marine drive spanning 48km has already been built with the government's own fund, with another 32km of Shilkhali-Teknaf-Sabrang highway currently under construction. 

When the new marine drive is completed, economic activities in the region will increase and the tourism industry will get a boost, said the proposal. Besides, the marine drive will play a big role in connectivity with the Asian Highway and Bangladesh-China-India-Myanmar corridor.

When the government gives consent, the state-owned company will ensure financing of the projects by the Chinese government, road ministry officials said.

The two projects were approved under the new policy for implementation of projects with soft loans from China.

Bangladesh will continue to allow China to select contractors only for priority projects financed with low-cost loans from Beijing, as Dhaka's efforts to enforce limited bidding are yet to produce any positive outcome.

The cabinet committee made the decision in August. However, before taking the decision, approval has to be taken from the cabinet committee on economic affairs.

For more than a year, the government has been pushing for putting in place a limited tendering system for all projects funded with concessional loans from China.

But the issue remains pending as China has not given its final decision on the limited tendering despite agreeing on the issue and exchanging several letters and holding talks over a period of more than a year. This prompted the government to take a decision to follow a two-way policy for projects financed with low-cost loans from China. 

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