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21 January, 2018 01:00:22 AM / LAST MODIFIED: 21 January, 2018 11:33:03 AM
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Padma rail link project hits snag

China yet to confirm financing deal for $3,138.75m project
Jagaran Chakma
Padma rail link project hits snag

An uncertainty hangs over the implementation of the Padma Rail Link Project as China is yet to confirm the deal to finance it. According to finance ministry sources, China had earlier assured Bangladesh of signing the deal by December 2017. But now, China has informed the finance ministry that the decision to finance the project was pending with the higher ups in the Chinese government.

Talking to The Independent, Additional Secretary (Asia Wing) of the Economic Relations Division (ERD) Md Zahidul Haque said a delegation led by State Minister for Finance and Planning MA Mannan will visit China at the end of this month to meet senior government representatives there and settle the issue. Haque, however, added that the signing of the deal may take some time.

According to an earlier announcement by ERD Secretary Kazi Shofiqul Azam, Bangladesh had finally managed to arrange funds for the much-hyped project from China’s Exim Bank and the agreement was to be signed soon.

He, however, was not clear whether the funding would be in the form of a concessional or non-concessional loan.

Exim Bank of China primarily agreed to finance the project worth USD 3,138.75 million.

Earlier, the Prime Minister’s Office (PMO) and the finance minister in January 2017 had separately written to Chinese President Xi Jinping and the Chinese commerce minister in, requesting speedy funding for the Padma Rail Link Project.

The PMO’s letter to Xi mentioned: “Prime Minister Sheikh Hasina’s desire is to open train services through the Padma Multipurpose Bridge on the same day that the bridge is completed and opened. To achieve this target, the project has been listed as a fast-track project by the government of Bangladesh and is, therefore, under the direct supervision of the prime minister.”

On September 15, 2016, the ERD had sent a loan proposal of $3,138.75 million to the Chinese embassy in Dhaka. Then on November 25, 2016, the PM had approved certain steps to expedite the signing of the credit deal for the project.

ERD sources said Bangladesh will bear 15 per cent of the cost of the Padma Bridge Rail Link Project and the remaining 85 per cent will be borne by China’s preferential buyers’ credit in US dollars.

In both cases (buyers’ credit and soft loan), the interest rate will be 2 per cent with

repayment periods of 20 years, including a five-year grace period.

ERD Secretary Azam indicated that the interest of the commercial loan will be around 2.5 per cent.

Bangladesh has pursued the financing of more projects, especially the 172-km-long Padma Bridge Rail Link Project.

It would be implemented by 2022, but the laying of a portion of the railway tracks would be completed by 2018 so that people can use the bridge by both road and rail networks.

The government plans to open the bridge to public in December 2018. The project is divided into four segments—Dhaka-Gendaria, Gendaria-Mawa, Mawa-Bhanga and Bhanga-Jessore rail tracks.

The tracks will run through seven districts of Dhaka division—Dhaka, Narayanganj, Munshiganj, Shariatpur, Madaripur, Faridpur and Gopalganj— and the two districts of Narail and Jessore in Khulna division.


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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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