The Asian Development Bank (ADB) has passed a $1.2 billion financing scheme for the second phase upgradation of the Dhaka-Northwest international trade corridor in Bangladesh.
“Bangladesh has good prospects of becoming a regional trade hub, if the country’s transport infrastructure can be improved to bring down transport costs and make the sector more competitive,” Dong Kyu Lee, Unit Head of Project Administration in ADB’s South Asia Department said after the loan was passed on Tuesday.
The ADB funded project is expected to significantly boost trade and prosperity along the trade corridor route, which is the second busiest import-export pipeline in the country.
Transport infrastructure is the centerpiece of the ADB-supported South Asia Subregional Economic Cooperation (SASEC) programme, which promotes regional prosperity, said an ADB media release on Tuesday.
Since 2001, SASEC members have invested more than $9.17 billion in projects with a regional dimension, including 31 transport projects worth $7.3 billion. S
ASEC transport investments in Bangladesh focus on developing highway corridors.
Almost 70 percent of all passenger traffic account for road travels in Bangladesh and 60 percent of freight is shipped on roads. In addition to that, traffic in Bangladesh is growing 8 percent annually.
ADB has been a partner of the government in improving the Dhaka-Northwest corridor since 1994, when the landmark Jamuna Bridge Project was approved.
A first ADB loan of $198 million was approved in 2012 for what is now considered phase 1 of the international corridor project. This increased road capacity on 70 kilometers (km) of the Joydeypur-Elenga section of the road.
Operational efficiency of two of the land ports—Burimari and Benapole — were also boosted upon completion of the projects.
Phase 2 continues ADB’s support to the corridor by improving the 190-km section from Elenga through Hatikurul to Rangpur. Road operation and management in the Roads and Highway Department will also be strengthened.
The total cost of the project is $1.67 billion, of which the government will meet $472.6 million.
The work will be carried out over 10 years to August 2027, with funding from three more tranches from the facility at intervals.
Accompanying the assistance package is an ADB technical assistance (TA) grant of $2 million to support the government in updating its Road Master Plan, and enhancing planning and monitoring activities associated with roads. The TA is to be carried out from January 2018 to December 2023.