Bangladesh has signed a $150 million loan agreement with the Asian Development Bank (ADB) on Monday “to improve the railways”.
The Senior Secretary to the Economic Relations Division, Iqbal Mahmud and the ADB’s Country Director, M. Teresa Kho signed the agreement in Dhaka on Mondy.
The assistance will help complete the double-tracking of the 64 kilometer railway lines between Tongi and Bhairab Bazar, improving the signalling system of 11 stations in the Darshana-Ishurdi section, and regenerating the yards and extending the loops in the Darshana-Sirajganj Bazar section, the secretary said.
With the interest rate more than 1 percent, including the London Inter Bank Offered Rate – LIBOR – and the bank’s service charge, the loan has a repayment period of 25 years with a grace period of 5 years.
Mahmud said the assistance forms part of a $430 million financing facility agreed between the government and the ADB in 2006 to revamp the entire railway system.
According to the main agreement, the funds will be released in four tranches.
ADB has already provided $ 130 million for double-tracking the Tongi-Bhairab Bazar section, and implementing reforms.
Replying a question on why it is taking time to get the loan though the agreement was signed in 2006, Mahmud said, reforms, currently underway in the railways took time.
“We all wanted reforms in the sector first,” he said.
The ADB Country Director said, the reforms and infrastructural development would help increase container transportation by 10 percent and raise the number of daily trains in Tongi-Bhairab Bazaar section by 25 percent by 2020.
“The improvement will result in low operating costs for users and increasing the competitiveness of Bangladesh for investment,” she said.
Photo Credit: ABD