China looks to invest more in Bangladesh Railway

After high-speed rail and the research and development center of Bangladesh Railway (BR), China now wants to invest for building new rail lines connected to several economic zones, Chittagong Sea Port and new Teesta and Hardinge bridges.

China Energy Engineering Corporation Ltd or Energy China (CEEC), a Chinese state-owned conglomerate, also expressed interest to construct and modernize railway workshops and build accessories factory here.

The company, with a partnership with another state-owned Chinese company, intended to invest in total 10 projects under the Government-to-Government-Public Private Partnership (PPP) framework, documents show.

Zhang Deliang, vice president of China Energy International Group Company Ltd, a subsidiary of CEEC, has sent two separate proposals to the Railways Minister Nurul Islam Sujan on May 22.

The Railways Ministry last month wrote to BR's Director General Dhirendra Nath Mazumder to give opinion over the proposals upon scrutinizing those, BR sources said.

Under the G2G-PPP arrangement, Bangladesh may request other governments to provide financial support and select state-owned or private entities to act as the investors.

The company will build, maintenance and operate the structure for a certain period and get money following the terms mentioned in the agreement.

No project under the G2G-PPP arrangement has yet to be implemented in Bangladesh. Discussions with several countries, including Japan and South Korea, have been going on to implement some projects under this model.

The Chinese proposal comes at a time when BR is implementing its biggest yet ever project -- Padma Bridge Rail Link -- with Tk 39,246 crore in Chinese loan.

Two more rail projects were expected to be implemented with Chinese loans. Beijing had even selected two Chinese contractors for these projects, but both projects are now uncertain as China pulled out funding from one while the selected Chinese contractor declined to work for another project in a decreased price.

Different Chinese companies are also involved with at least five major railway infrastructure projects, including two fast-track projects -- Padma Bridge Rail Link and Chattogram-Cox's Bazar Rail Link.

Meanwhile, China, earlier this year, has proposed to invest in high-speed railway project between Dhaka and Chattogram under the G2G PPP framework.

The country has also selected China Railway Group Ltd (CREC), a state-run company, for implementing the project, which was apparently put on the back burner considering the huge amount of money -- Tk 93,35,0.93 crore ($1=Tk 84) -- required for its implementation.

Besides, another Chinese state-run company-- China Railway Design Corporation (CRDC)—submitted a proposal to set up a research and development centre for railway in a joint venture with the BR.

None of the proposals yet to see visible progress.

WHAT ARE THE PROPOSALS

CEEC, a state-owned conglomerate with its headquarters in Beijing, is involved in energy/power, real estate and infrastructure sectors, reads the proposals. 

Their partner CRDC, the design enterprise subordinate to China State Railway Group Co Ltd, was involved in carrying out the feasibility study and detailed design for the high-speed rail project, it said.

In a proposal, the company said BR is promoting the process of modernization. But the existing 'aging and disrepair maintenance facilities' cannot meet the growing demand.

At the same time, it said, BR needs to purchase large quantities of spares parts and maintenance tolls from abroad spending foreign exchange.

"We propose to participate in the renovation of the existing workshops under the G2G PPP mode and invest in an accessories factory for domestic sales and supply to surrounding countries," reads the proposal.

It expressed interest to participate in the following projects: construction of a new diesel locomotive workshop in Chattogram; modernization and upgradation of signal workshop at Chattogram's Kadamtali; reconstruction of existing carriage and wagon workshop in Chattogram; and establishing an accessories factory.

In a separate proposal, it said, Bangladesh has an excellent economic development momentum and has become the region with the most investment potential in South Asia.

As the government is setting up economic zones at Jamalpur, Mirersarai, Feni and other places, the railway link with those economic zones will give huge advantage in transportation because of its abundant transportation capacity, punctuality and quickness, it said.

It is urgent to build several multi-functional bridges due to the natural barrier of the river and lack of crossing facilities. "We wish to adopt PPP/G2G PPP mode to participate in Bangladesh Railway's economic zone rail link line   and bridge projects," it added.

The six projects are: construction of railway link to Feni and Mirersai economic zones; Jamalpur Economic Zone; Uttara EPZ in Nilphamari; construction of railway link to Bay Terminal in Chattogram; construction of a new bridge parallel to the existing Hardinge Bridge and Teesta Railway Bridge.

BR has already carried out feasibility study and detail design for rail line to connect Jamalpur and Mirsarai and Feni economic zones and new Teesta Bridge while study is going for Bay Terminal rail link and new Hardinge Bridge, BR source said.

Railways Ministry's Secretary Humayun Kabir and BR's Director General Dhirendra Nath Mazumder could not be reached over phone for comments, even after sending message.