The Asian Development Bank (ADB) will provide $360 million loan for improving the operational efficiency of Bangladesh Railway (BR) by procuring modern rolling stock and supporting the ongoing railway reform, reports BSS.
The Manila-based lending agency will sign two agreements in this regard on July 31 with the government of Bangladesh for funding the project titled “Railway Rolling Stock Operations Improvement Project”, said an official at the Economic Relations Division (ERD).
The official told the news agency that ERD Secretary Kazi Shofiqul Azam and ADB Country Director for Bangladesh Resident Mission Manmohan Parkash will ink the deals on behalf of their respective sides at the NEC-2 Conference Room in the city’s Sher-e-Bangla Nagar area on July 31 at around 4:00 pm.
Out of the total amount, ADB will provide $354 million loan as Ordinary Capital Resources (OCR) while the rest $6 million loan will come as Concessional OCR Lending (COL).
The ERD official said the project will contribute to increase the railway’s share in the country’s communication system as the railway is the core mode of the country’s transportation system.
The rolling stock will introduce auxiliary power units (APU) to Bangladesh Railway to significantly reduce diesel consumption when the locomotives are idling.
The project will also draw up investment plans for urgently required maintenance facilities, establish training programmes for the drivers, and run the enterprise-wide IT system.
The total cost of the project is $ 453.37 million, of which $93.37 will be met by the government. The project is due for completion at the end of June 2022.
Accompanying the loans, there will be a technical assistance grant of $ 500,000 to devise a training scheme for drivers in the use of the APU and recommend potential approaches to achieve the overall energy efficiency.
ADB will administer the grant, to be provided by the Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility, established by the Japan government.
“Railways in Bangladesh offer a cheaper, safer, and more fuel-efficient means of transport of goods and passengers than roads, but have been held back by lack of investment and aging and unreliable rolling stock,” said Tsuneyuki Sakai, an ADB Senior Transport Specialist.
“The ADB Railway Rolling Stock Operations Improvement Project will boost the operational performance of Bangladesh Railway by introducing new technology, equipment, and processes that will be cleaner and more efficient, cutting carbon dioxide emissions.” the ADB official said.
Under its Seventh Five-Year Plan for fiscal years 2016-2020, the government has put special emphasis on railway development, setting targets to increase the market share to 15 percent in freight transport and 10 per cent in passenger movements by 2020.
Under the railway reform supported by ADB, the government has taken steps to boost revenue by raising the level of passengers and freight tariffs that have remained unchanged for decades.
An increase in the operational capacity through new rolling stock is needed to generate more revenue.
SOURCE: The Independent