$2.76b Chinese Fund: Quick move to execute 3 projects
The government is acting fast to implement the projects China agreed to fund during President Xi Jinping's Dhaka visit last week.
Only four days into the signing of a Memorandum of Understanding between the two sides, the Cabinet Committee on Economic Affairs yesterday selected three Chinese firms to implement three mega projects with an estimated $2.76 billion of Chinese soft loan, officials said.
Two of the projects are under the railway ministry and one is under the shipping ministry.
These are among the 28 projects for whose financing a primary agreement was signed during the Chinese president's October 14-15 state visit.
Bangladesh's Economic Relations Division estimates that Dhaka would get $21.5 billion in soft loan from Beijing in the next five years.
Of the three firms selected, China Railway Construction Bridge Engineering Bureau Group Co Ltd will upgrade the 176km metre-gauge railway track from Akhaura to Sylhet to dual-gauge track.
The initial estimated cost of the project is $1.87 billion, of which China will provide $1.76 billion and the rest will come from the Bangladesh government.
A dual-gauge provides two separate track gauges. Normally, a dual-gauge track consists of three rails, two “vital” (or gauge) rails, one for each gauge, plus a “common rail”-- although sometimes commonality is not possible and four rails are required.
China Civil Engineering Construction Cooperation has been selected for constructing a 173km dual-gauge double-line rail track from Joydevpur to Ishwardi. Of the estimated cost of $941 million, China will provide $753 million. The government will pay the rest.
The job of expansion and modernisation of Mongla Port facilities has been awarded to China National Complete Engineering Corporation for an estimated cost of $550 million. China's assistance in this project has been estimated at $249 million while the rest will come from the government fund.
The first two projects have initial approval of the Planning Commission. Details of the Mongla Port project were not immediately available.
All the three companies have been selected without any bidding.
Last year, the government signed separate MoUs with these companies for the jobs.
With the companies selected, the ministries concerned will now start, upon cabinet approval, negotiations with them for inking the commercial contracts, said a finance ministry official.
The projects will then be placed before the Executive Committee of the National Economic Council (Ecnec) and the Purchase Committee. The loan deals with Chinese Exim Bank will be signed after the final approvals of the two bodies.
Under the existing policies, China offers soft loan through its Exim Bank at 2 percent interest. The commitment charge is 0.2 percent and management fees 0.2 percent. The loan repayment period is 20 years including five years of grace period, said the finance ministry official.
A railway ministry official said the project costs had been determined based on the primary appraisal of the projects, and that the cost may go up.
According to the rail ministry's proposal, once the dual-gauge rail line on Akhaura-Sylhet section is completed, the travel time from Dhaka to Sylhet will come down by two hours and from Dhaka to Chittagong by three hours. At present, the travel times are seven hours and 10 hours respectively.
The track is an important part of the Trans-Asian Railway route. So it has a crucial role in regional connectivity, according to the proposal.
Joydevpur-Ishwardi track is linked with Trans-Asian Railway route 1, 2 and 3. In future, it will also play a significant role in inter-Asian and sub-regional railway connectivity.
The track will cut Dhaka-Rajshahi travel time to four hours from six and a half hours at present. The travel time from Dhaka to Khulna, Dinajpur and Lalmonirhat will come down by two hours, the proposal said.
At the moment, it takes nine to 10 hours to reach each of the destinations from Dhaka.
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