ADB funds Bangladesh rail improvements

22 Feb 18

The Asian Development Bank has approved a total of $360m in loans to reform the railway system in Bangladesh.

The complete cost of the railway project is $453.37m, of which $93.37m will be met by the government.

ADB’s loans will buy modern rolling stock and support reform to promote a shift from roads to rail.

“Railways in Bangladesh potentially offer a cheaper, safer, and more fuel-efficient means of transport of goods and passengers than roads, but have been held back by lack of investment and aging and unreliable rolling stock,” said Tsuneyuki Sakai, an ADB senior transport specialist.

“The ADB Railway Rolling Stock Operations Improvement Project will boost the operational performance of Bangladesh Railway by introducing new technology, equipment, and processes that will be cleaner and more efficient, cutting carbon dioxide emissions.”

The development bank said Bangladesh Railway had been operating at a loss and its operating costs were about double its revenue.

Under the ADB supported programme, the government plans to boost revenue by raising the level of passenger and freight tariffs that have remained unchanged for decades.

The Railway Sector Improvement Programme started in 2006 and the bank has provided a total of $2.81bn. Three ADB loans invested in network improvements while another loan in 2015 supported procuring rolling stock and maintenance equipment.

The latest programme seeks to address the investment and modernisation of the railway, including wagons and vans, as well as investment plans for required maintenance facilities, training programmes for drivers and an enterprise-wide IT system.

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