Asian Development Bank approved USD 360 million loans for the acquisition of new rolling stock and the implementation of railway reform in Bangladesh.
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,” Tsuneyuki Sakai, an ADB Senior Transport Specialist said.
The project supported by ADB envisages the purchase of 40 broad gauge locomotives, 125 luggage vans, and 1,000 wagons for freight trains for use on major lines of the rail network. The rolling stock will introduce auxiliary power units (APU) to Bangladesh Railway, to significantly reduce diesel consumption when the locomotives are idling. The project will also draw up investment plans for urgently required maintenance facilities, establish training programs for the drivers, and run the enterprise-wide IT system.
The total cost of the project is USD 453.37 million, of which USD 93.37 will be covered by the government. It is due for completion around the end of June 2022.
Accompanying the loans is a technical assistance grant of USD 500,000 to devise a training scheme for drivers in the use of the auxiliary power units and recommend potential approaches to achieving overall energy efficiency. ADB will administer the grant, to be provided by the Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility, established by the Government of Japan.
Under its Seventh Five-Year Plan for fiscal years 2016-2020, Bangladesh government has placed special emphasis on railway development, setting targets to increase the market share to 15% in freight transport and 10% in passenger movements by 2020.
Under the railway reform supported by ADB, the government has taken steps to boost revenue by raising the level of passenger and freight tariffs that have remained unchanged for decades. An increase in the operational capacity through new rolling stock is needed to generate more revenue.
Starting with a Railway Sector Improvement Program in 2006, ADB has provided four loans to the government for railway development totaling USD 2.81 billion. Three loans invested in network improvement in key sections of the railway, with two targeting enhanced South Asian subregional connectivity.
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