Bangladesh's four railway mega projects under Belt and Road Initiative suffer delay

Mir Mostafizur Rahaman | Thursday, 25 February 2021

Four mega projects of the Bangladesh Railway (BR) have suffered setback due to the delay in processing loan documents by the relevant Bangladeshi implementing agencies and bureaucratic complexities in China, a meeting, held recently at the Prime Minister's Office (PMO) to review the progress of China-funded railway projects worth US$ 5.9 billion, has found.

Of the four railway projects, work of only one has started.

The projects under review were construction of $902.33 million Joydevbur-Jamalpur dual-gauge rail-track, $1.272 billion Akhaura-Sylhet dual-gauge rail-track, $1.045 billion Joydevpur-Ishwardi rail-track, and $2.667 billion Padma Bridge rail-link.

The loan agreement has been signed only in the case of the Padma Bridge rail-link project.

The loan application for the Joydevpur-Jamalpur rail-track project was sent to China in June 2020 and for the Akhaura-Sylhet rail-track project in November 2018. For the Joydevpur-Ishwardi rail-track project, the application was sent to China in November 2019.

All these projects were primarily endorsed under the Chinese Belt and Road Initiative (BRI) in 2016. But, it is not clear when the loan agreements of these projects will be signed, an official preferring anonymity said.

The meeting was told that the implementing agencies in Bangladesh take a long time in selecting Chinese contractors under direct purchase method (DPM), and Bangladesh also made slow progress in sending the primary loan applications to China.

Besides, China has recently changed its loan evaluation system, and now loan applications are processed in two phases - primary evaluation and final evaluation, which also caused delay in loan processing for the projects. Previously, there was only one evaluation, the meeting was also told.

On the other hand, there have been some administrative changes in the Chinese commerce ministry and the Exim Bank, which also have delayed the loan processing, the officials concerned opined.

Another cause of complication is the combination of preferential buyer's credit (PBC) and concessionary loan in the same project, they added.

Among these four projects of the Bangladesh Railway, the Joydevpur-Ishwardi rail-tack construction project needs to be expedited soon, as the line will pass through the new rail-bridge over Jamuna River.

The work of the Jamuna rail-bridge has started, and the rail-track construction work needs to be completed simultaneously, as without the track the bridge project is meaningless, an official said.

The bridge project is being implemented by the Japan International Cooperation Agency (JICA).

On the other hand, the 'fast-track' Padma Bridge rail-link project has started, as loan agreement for the project was signed in April 2018.

But its progress is not satisfactory. The project implementation rate is only 33 per cent so far.

[email protected]