Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
It comes as a significant fresh push for regional connectivity as the World Bank bets US$750 million on salvaging the struggling BBIN corridor meant for connecting four South Asian nations.
Officials say the Washington-based lender offers to assist in improving port efficiency, customs modernisation, trade facilitation and upgrading regional-connectivity infrastructures.
The proposed $750-million loan will be provided to Bangladesh government for upgrading the trade and regional connectivity, says a senior Economic Relations Division (ERD) official.
"We have already discussed it with the WB. The bank has already assured of providing the funds to facilitate the regional connectivity," he adds.
As conceived by the movers, BBIN (Bangladesh, Bhutan, India and Nepal) is a regional transport initiative where a motor-vehicle agreement was signed for developing a sub-regional protocol for a cost-effective, efficient and seamless multimodal transport system linking these four of the South Asian nations.
The deal was signed in June 2015 at the Bhutanese capital of Thimphu to facilitate cross-border movement of passenger and cargo vehicles.
Later, three of the countries ratified the agreement while Bhutan backpedalled, citing environmental concerns of the tourist-haven Himalayan country.
After the pullout of Bhutan, the BBIN move slowed and struggling for years as it has yet to be functional after more than six years of the deal.
The ERD official says since the BBIN is a very potential corridor for trade and investment promotion in this sub-region, Bangladesh wants to enhance its capacity and infrastructure for facilitating the trans-border traffic initiative.
He mentions that the WB has proposed to provide the $750 million in loan in four components under the 'BBIN regional transport and trade facilitation programme-Bangladesh phase'.
Under the project, the multilateral development financier has offered the Bangladesh Land Port Authority $250 million for upgrading Benapole, Burimari and Bhomra land ports for enhancing their foreign trade-handling capacity.
The Washington-based lender is expected to lend $170 million for upgrading customs houses in seaports and land ports, and conducting reforms and modernizing the country's tariff and trade policies.
It will provide $300 million worth of loans for upgrading a highway that would improve the cross-border trade and business.
Roads and Highways Department (RHD) would upgrade the Sylhet-Charkhai-Sheola-Sutarkandi highway which would connect the Asian Highway-1 and 2.
The highways will be a part of the Bangladesh-China-India-Myanmar (BICM) road corridor.
Bangladesh will also get $16 million worth of funds from the WB to enhance the reforms in trade policy, tariff policy, National Trade and Transport Facilitation Action Plan.
The ERD official says, "Recently, the WB has completed its project-preparation mission. The appraisal mission of the Bank will complete within April and the negotiation is expected to take place in May this year."
He adds: "We are hopeful of signing the loan agreement with the WB by June this year."
According to a World Bank estimate, seamless connectivity between Bangladesh and India would increase the former's real income by 17 per cent while it would increase India's real income by 8.0 per cent.
So, it is possible to realise this huge trade potential by implementing the BBIN deal and commencement of the discussion for a multimodal BBIN connectivity protocol.