The government of Bangladesh and Asian Development Bank (ADB) on Tuesday signed two loan agreements of $360 million to buy modern rolling stock and support reform in Bangladesh Railway.
Secretary, Economic Relations Division (ERD) Kazi Shofiqul Azam and ADB Country Director Manmohan Parkash signed the loan agreements on behalf of Bangladesh and ADB respectively.
The signing ceremony was held at the NEC-II conference room, Sher-e-Bangla Nagar in the city.
“We’re supporting the government’s initiative under the Seventh Five-Year Plan for increasing the market share of railway freight transport from 4 percent to 15 percent and passenger movements from 4 percent to 10 percent by 2020,” said ADB Country Director Manmohan Parkash.
He said new rolling stock under the project will introduce new technology, help generate more revenue, improve operational capacity and be environment friendly. “It will improve the overall railway systems which offer a cheaper, safer, and more fuel-efficient means of transport of goods and passengers than roads,” Parkash said.
The loans for the government’s Railway Rolling Stock Operations Improvement Project will address the investment and modernization needs of Bangladesh railway.
It will procure 40 broad gauge locomotives, 125 luggage vans, and 1000 wagons for freight trains for use on major lines of the rail network.
The new rolling stock will introduce auxiliary power units (APU) to Bangladesh Railway to significantly reduce diesel consumption when locomotives are idling.
The project will also invest in urgently required maintenance facilities, and run the enterprise-wide IT system.
Accompanying the loans is 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 achieving 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 Government of Japan.
The government of Bangladesh, earlier, proposed a project for Asian Development Bank (ADB) financing to improve the operational efficiency of Bangladesh Railway through the procurement of modern rolling stock, preparation of investment projects to enhance its rolling stock maintenance capacity and support for the ongoing railway reform.
The project will contribute to the increase in railway share as a core transportation mode of the country and to the modal shift from roads to rail, according to the ADB.
BD Post Report