In view to open train services along with road vehicles through the Padma Multipurpose Bridge (PMB) on the same day that the Bridge is completed, Bangladesh agreed to take Preferential Buyers Credit (PBC) instead of soft loan from China. After a hectic correspondence, China agreed to finance 85 per cent of total cost of the project, sources said. Despite, the government agreed to take PBC as it is hungry for fund the Chinese authority is yet send any response to sign agreement by mid June.
Finance ministry urged vice president of Exim Bank of China, Sun Ping to sign the agreement by mid June. It also urged to complete evaluation of the project and send the framework of the agreement to Economic Relations Division (ERD) in order to sign formal loan agreement.
The ERD sent a loan proposal of USD 3,138.75 million to the Chinese embassy in Dhaka on 15 September 2016. Once constructed, this railway—for the first time in the history of Bangladesh—will directly link the capital city Dhaka with the south-western region of Bangladesh, the letter said.
This project is included in the ‘Memorandum of Understanding on Strengthening Investment and Production Capacity Cooperation’, which was signed by China’s commerce minister and Bangladesh’s finance minister on 14 October 2016, when Xi Jinping visited Bangladesh.
Moreover, Bangladesh has asked China Railway Group Ltd (CREC) to start construction of the 15-km-long Padma Bridge rail link from Dhaka to Jessore district, sources in Bangladesh Railway said. On August 8 last year, China Railway Construction Corporation (CRCC) signed a $US 3.5 billion contract with the Bangladeshi government to build a new east-west railway via the 6.2km road-rail Padma Bridge.
The go-ahead to start construction of the 215km Padma rail link from Dhaka to Jessore, was given last month, and CRCC was commissioned to construct the line which is due to be completed by June 2022. The project will be funded by the Bangladeshi government (Tk 2900 crore) and through a soft loan from China (Tk 24700 crore).