Finance minister AMA Muhith has directed the Economic Relations Division (ERD) to take the necessary initiatives to accept China’s financing proposals for a four-lane highway from Dohazari to Cox’s Bazar via Ramu, a railway line from Ramu to Gundum, and a four-lane highway from Dhaka to Sylhet. In a recent letter to senior secretary Mejbahuddin Ahmed, the finance minister said the Chinese government is keen to invest in the highway from Dohazari to Cox’s Bazar via Ramu, and in the rail line from Ramu to Gundum as well, as it has reduced the interest rate to 1 per cent from the proposed 2 per cent. “A summary should be prepared for approval from Prime Minister Sheikh Hasina immediately,” he wrote. He further said there is no reason to wait for Asian Development Bank (ADB) funds. In another letter, Muhith said except from China, no assurance of financial assistance for the Dhaka-Sylhet four-lane highway has been received yet. “China has offered its cooperation for the project. We should take a final decision regarding this issue,” he added. He also asked the ERD to inform the road transport and bridges ministry to take necessary initiatives in connection with the project. The ADB is also interested to provide a sum of USD 1.5 billion for construction of the railway line from Dohazari to Cox’s Bazar via Ramu, and from Ramu to Gundum, under the South Asia Sub-regional Economic Cooperation (SASEC) Railway Connectivity Investment Programme. This line will connect with the Trans Asian Rail line. The ERD’s joint secretary (ADB wing), Saifuddin Ahmed, told The Independent that negotiations with the ADB for financing the project are nearly complete. If the government decides to take a loan from China, then it will ask the ADB to cancel negotiations regarding the financing of the project.
Earlier, the plan was to construct a 127.66-km-long single-line metre-gauge railway track. Now, the length of the proposed railway track has been increased to 128.26 km. Saifuddin Ahmed also said the ADB is keen to invest in the railway sector in South Asia to to boost regional trade among the South Asian nations. Earlier, the ADB had estimated the project cost at between USD 1.2 billion and USD 1.5 billion for the railway line project up to the border with Myanmar.
According to sources in the rail ministry, construction of the project is likely to begin in July 2017. It is expected to be completed by 2021. The ADB team has completed the updated feasibility study of the project. The railway ministry has proposed hiking the construction cost of the much-delayed Dohazari-Cox’s Bazar single-line dual-gauge railway track project by 603 per cent, apart from extending its timeframe to June 2020. On July 6, 2010, the Executive Committee of the National Economic Council (ECNEC) had approved the project to construct a single-line metre-gauge railway track from Dohazari in Chittagong to Cox’s Bazar via Ramu and from Ramu to Gundum along Myanmar’s border, entailing an expenditure of Tk. 1,852.35 crore. But the railway ministry proposed the first revision of the project, entailing an additional cost of Tk. 11,177.33 crore, thereby raising the overall project cost to Tk. 13,029.68 crore. The ministry also proposed extending the project period to June 2020 from December 2013. Of the proposed first revision, Tk. 4,112.71 crore will come from the national exchequer; the remaining Tk. 8,916.98 crore will come as project assistance.
Of the proposed additional amount, an increase of Tk. 1,669.08 crore will occur for price adjustment and physical contingency, which is 90.11 per cent higher than the original Development Project Proposal (DPP); the hike of Tk. 716.92 crore will be for CD/VAT purposes, which is 38.70 per cent higher than the original project cost; and Tk. 1,110.15 crore will be for land acquisition, which is 60.47 per cent higher than in the original Annual Development Programme (ADP).