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The Financial Express

Dhaka to request Beijing to reconsider funding Joydebpur-Ishwardi rail project

| Updated: July 28, 2021 17:46:37


File photo used for representational purpose. (Collected) File photo used for representational purpose. (Collected)

Bangladesh Railway (BR) will request the China government to reconsider funding the Joydebpur-Ishwardi double-line project after the Chinese side pulled out of the project.

The decision was taken during a meeting between BR and the Railways Ministry early this month, sources said.

The Bangladesh authorities have decided to make the request as the project is important in improving train services with north and western part of the country. Moreover, the line is a part of the Trans Asian Railway network.

Though the Chinese government has mentioned some points obtained during evaluating the project, the BR thinks most of the issues are answerable and wants to request the Chinese authorities for a re-evaluation of the project to remove the confusion, said sources.

The project office has already started to work on the issues and has reduced the project cost from US$1.23 billion to $1.07 billion, according to a recommendation by a special committee.

"We are now working on the project from the Chinese government's point of view and will soon send a request letter to the Economic Relations Division (ERD) [Bangladesh] by answering all their points," said a project official.

He hoped that the Chinese government might re-evaluate the project, with all the points and issues being answered.

On March 29, the Chinese government through the Chinese embassy in Bangladesh informed the ERD that the Joydebpur-Ishwardi dual gauge project could not pass its evaluation process.

It said the evaluation, conducted through an independent professional agency, found problems in the project, including a lack of 'in-depth preliminary work and insufficient feasibility study'.

Other issues included high unit cost, no real prediction of freight volume, and risk of debt repayment.

The Joydebpur-Ishwardi project was among the four projects listed in a memorandum of understanding for funding which was signed during the Chinese President Ji Jingpin's visit to Bangladesh in October, 2016.

The BR has been facing problems in operating trains in its western zone after Tongi station due to having single line metre gauge track despite increase of passenger and freight services in the last one decade.

Regarding the Chinese government objections, BR officials said the issues of high unit cost and the low feasibility study are not true.

The unit cost of a kilometre of the Joydebpur-Ishwardi double-line project is US$7.50 million, which is much lower compared to the Padma Bridge Rail Link (PBRL) project, they said.

This is to mention that PBRLproject is being executed under the government-to-government (G2G) initiative with China.

The unit cost of the Joydebpur-Ishwardiproject is even lower than that of the Akhaura-Sylhet rail track project, the BR officials added.

The PBRL project's unit cost is $17.32 million. On the other hand, unit cost of the Akhaura-Sylhet project, which the Chinese government has recently agreed to fund, is estimated at $8.51 million.

In the changed scenario, as the project cost of the Joydebpur-Ishwardi project has been reduced through price adjustment, unit cost of the project dropped to $6.57 million, said officials.

They said a committee formed to rationalise the project cost in a meeting in August last year recommended reducing the total cost to $1.07 billion.

Of the earlier estimated Tk 142.50 billion ($1.23 billion) project cost, the Chinese government was supposed to provide Tk 87.56 billion.

At present, 28 trains use the existing single-line track - the number of trains is expected to increase to 74 per day, reducing travel time by 30 per cent of the passengers and 20 per cent of freight trains.

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