China Railway to build US$ 3 billion rail network in Bangladesh

The government of Bangladesh has given the go-ahead for China Railway Group to build a 215 km-long rail link, set to run from the capital Dhaka to Jessore.

As well as the line itself, the current proposal includes the construction of 66 major and 244 minor bridges, 14 stations and the procurement of 100 passenger coaches.

A road and rail bridge will span the Padma river, with a four-lane road on the upper deck and a single railway track running beneath.

The state-owned China Railway Group was not granted the project through open bidding, but selected by the Chinese government, which will provide the majority of the funding in the form of soft loans to Bangladesh.

The company initially sought US$ 6.25 billion for the project, with further payments for land acquisition costs, resettlement fees and taxes; following negotiations, however, the cost was reduced to Tk 24,749 crore (around US$ 3.1 billion).

The railway ministry said, “The contract price is reasonable and reflects the level of pricing that would have been achieved if the project had been promoted through international competitive bidding as planned earlier.”

With construction scheduled for completion by 2022, some sections of the line are expected to be in use by 2018 – including the Padma river crossing.

The total project cost is Tk 34,989 crore (US$ 4.46 billion), with Tk 24,749 crore to be met by the loans from the Chinese government. According to reports, the interest on the loan has been set at 2%, with a 20-year repayment period.