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The Financial Express

Three China-funded rail projects see no headway in more than 4 years

| Updated: August 05, 2021 10:45:05


Illustrative photo Illustrative photo

Bangladesh Railway (BR) is yet to make any headway in implementing three out of four projects with the Chinese fund, though four and a half years have passed.

Regarding the Chinese government's support in implementing the four projects, Bangladesh and China signed a memorandum of understanding (MoU) during the Chinese president's visit to Bangladesh in October 2016.

Of the projects, only the Padma Bridge Rail Link project has made progress, as a US$2.67 billion contract was signed on April 27, 2018.

Three other projects are: conversion of metre-gauge rail into dual-gauge between Akhaura and Sylhet, construction of dual-gauge double line between Joydebpur and Ishwardi, and construction of dual-gauge double line between Joydebpur and Jamalpur via Mymensingh.

However, these projects have remained stuck, although the Chinese government selected three Chinese contractors for the projects.

On March 29, the Chinese government through the Chinese embassy in Bangladesh informed the Economic Relations Division (ERD) that the Joydebpur-Ishwardi dual gauge project could not pass its evaluation process.

It said the evaluation, conducted through an independent professional agency, found problems in the project, including a lack of 'in-depth preliminary work and insufficient feasibility study'.

Other issues included high unit cost, no real prediction of freight volume, and risk of debt repayment.

On the other hand, the Akhaura-Sylhet dual gauge line project has been stuck during the negotiation, since the Chinese company expressed unwillingness to construct the corridor at 20 per cent less than the proposed cost - as requested by the Bangladesh government.

The Prime Minister's Office (PMO) requested the Chinese firm to reduce the cost as various quarters found it costly.

Sources said following the rejection of the Chinese company in the reduction of the cost, the BR decided to inform the PMO of the situation and get its opinion.

Regarding the construction of a dual-gauge double line between Joydebpur and Ishwardi, the BR decided to request again the Chinese government to reconsider funding after the Chinese side pulled out of the project.

The decision was taken during a meeting between BR and the Railways Ministry early July this year.

Regarding the Chinese government objections, BR officials said the issues of high unit cost and the low feasibility study were not true.

Meanwhile, the negotiation with the Chinese company on the Joydebpur-Mymensingh-Jamalpur project remains stopped due to reasons unknown.

A committee formed by the PMO on September 30, 2020 to review negotiated costs of the three railway projects recommended reducing the Akhaura-Sylhet and Joydebpur-Ishwardi projects.

But all the three projects were approved in the meeting of the Executive Committee of the National Economic Council (ECNEC) last year with the high cost.

The Akhaura-Sylhet dual gauge conversion project cost was estimated at Tk 161.04 billion. BR negotiated with the Chinese company named China Railway Construction Bridge Engineering Bureau Group Company Ltd for a TK 120.79 billion loan.

The BR has been negotiating with China Civil Engineering Construction Corporation for the Tk 142.50 billion Joydebpur-Ishwardi project for getting a loan of Tk 98.39 billion.

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