The Financial Express

Uncertainty still hovers over Padma rail link

Procrastination prevails over project funding by Chinese EXIM bank

| Updated: November 17, 2017 10:40:45

File Photo (Collected) File Photo (Collected)

Financing Padma rail link, part of a dream project on communications infrastructure, still looks uncertain as the designated Chinese bank delayed signing loan agreement, sources said.

They said Bangladesh Railway (BR) has already completed procedures to start the project, including readying 50 per cent of the land according to the recommendation of the Chinese EXIM bank.

But the project office has not yet got any response, either from the bank or from the Economic Relations Division (ERD), after over a year of the signing of commercial contract between the BR and a Chinese company.

BR officials said the land-acquisition process on both sides of the under-construction Padma Bridge started last year and now was nearing its completion. But they have yet to get draft for loan-deal signing although a hint was given about striking the agreement in December next.

They said finalizing draft would take some weeks to share and validate with all ministries concerned, including the Ministries of Finance and Law.

The Railway undertook the Padma Rail Link Project during the fiscal year 2016-17 with a target to launch the rail communications over the Padma Bridge simultaneously on the day of inauguration of the road bridge-a much-cherished mega-infrastructure project undertaken as a challenge after international multilateral donors had backtracked following certain disputes.

It was also potential one of the projects up for signing financing agreement during Chinese President Xi Jinping's visit to Bangladesh in October 2016. But, due to delay in the process of completing necessary procedures, the loan agreement was not done.

All this led to delay in the process of starting implementation of the Padma Rail Link project by more than one and a half years from the schedule. It also made BR performance lower ever, 66 per cent, in the annual development programme

A BR official said a meeting with the ERD is likely on the issue of Padma Rail Link Project this week where discussion on the funding arrangement would be held.

However, ERD sources said there has been some progress in the process of funding as the EXIM bank visited the country last September and assured of providing funds for the rail project along with four other projects. Different documents are still being sent to meet the queries of the Bank.

"We expect the loan signing in December," said one official, preferring not to be named.

The BR signed the commercial contract with the Chinese company for implementing Padma Rail Link project with a fund worth US$ 3.4 billion under government-to-government arrangement in August 2016.

This 215-kilopmetre rail link, crossing over the mighty river, is to reduce travel distance and contribute to the country's economy through increased freight traffic to avail the port facilities at Mongla seaport.

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