ADB okays $1.5b loan for railway linking Cox’s Bazar

Staff Correspondent

The Asian Development Bank will provide US$ 1.5 billion to Bangladesh to build a dual-gauge railway line between Dohazari and Cox’s Bazar, the Manila-based multilateral lending agency on Wednesday said.
The investment will be the largest the ADB has ever made in Bangladesh and the biggest the Bank has made in railways, it said.
The loan proposal was approved at the ADB’s board meeting held on the day.
The new railway line will be the part of the Trans-Asia Railway network which will also improve access to Myanmar and beyond, it said in a press release issued on the day.
The Trans-Asia Railway, an initiative led by United Nations Economic and Social Commission for Asia and the Pacific, aims to provide seamless rail links between Asia and Europe to better connect peoples and markets.
The planned 102-kilometer stretch of railway will connect the tourist town of Cox’s Bazar with the existing Bangladesh railway network, said ADB’s South Asia Department principal transport specialist Markus Roesner.
‘It will provide a key boost to local and regional tourism by providing both safe and environmentally friendly connectivity from Dhaka and Chittagong,’ he said.
Building the rail section and nine stations between Dohazari and Cox’s Bazar will cost a total of US$ 2.012 billion, with the government providing US$ 512 million in finance.
The loan will be disbursed in four tranches till 2022 and all the tranches have a 25-year term with a 5-year grace period.
The interest rate for all except US$ 90 million of the first tranche will be based on Libor, while the US$ 90 million in special funds will carry an interest rate of 2 per cent.
The stations will integrate design features that are friendly to the elderly, women, children, and people with disabilities.
The government is itself rehabilitating the 47-kilometer rail section between Chittagong and Dohazari, a union of Chandanaish Upazila under Chittagong district.
Demand is expected to be high from 2.2 million people living in the Cox’s Bazar district and to make travel easier, all train stations will have connections to other kinds of transport, ADB said.
The government is also keen to develop Cox’s Bazar as a tourism hub. Around 1.9 million tourists visit the beaches of Cox’s Bazar every year and with this the number is expected to grow 5 per cent annually.
Special tourist trains will operate between Dhaka and Cox’s Bazar along the new line.
The project will help Bangladesh to boost its railway’s freight market share to 15 per cent and passenger market share to 10 per cent from the current 4 per cent respectively, the ADB said.

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