Upgrade of Key Bangladesh Transport Corridor to Spur Regional Trade - ADB

News Release | 26 November 2012

MANILA, PHILIPPINES - The Asian Development Bank (ADB) is providing $198 million, with an additional $60 million from partner organizations, to fund a partial upgrade of one of Bangladesh's most critical regional transport corridors together with two land ports, giving a shot in the arm to connectivity and trade across South Asia.

"Upgrading this important section of the Dhaka-Chittagong-Northwest transport corridor will give a big lift to both domestic and subregional trade, as well as encouraging more domestic and foreign investment," said Juan Miranda, Director General of ADB's South Asia Department. "The project is an integral part of the South Asia Subregional Economic Cooperation (SASEC) program's push to improve infrastructure and promote economic cooperation in one of the world's poorest and most densely populated areas."

The SASEC Road Connectivity Project, together with cofinancing, will expand and improve a 70 kilometer section of the Dhaka-Northwest corridor ― the second busiest arterial route in the country.

The narrow two-lane road currently suffers from serious congestion and high accident rates. Expanding the route to four lanes will help ease bottlenecks, reduce crashes, and provide the nearly seven million people living in the area with new business opportunities and better access to markets, schools and other social services.

The initiative will also upgrade land ports at Benapole and Burimari, which handle the bulk of goods transported between Bangladesh and India. These upgrades will boost trade volumes, improve traffic flows and reduce the loss of perishable goods.

Studies show upgrading regional transport corridors in Bangladesh will support the movement of about 18 million tons of freight in Bhutan, India and Nepal, boosting intra-regional trade across South Asia.

The SASEC program is an initiative of Bangladesh, Bhutan, India, and Nepal to build closer links that will spur growth and development across the sub-region. Its work covers activities in many sectors including transport, trade, energy, the private sector, tourism and the environment. ADB provides the program with a variety of support, including project financing, technical assistance, and advice.

As a public-private partnership initiative, a five-year performance-based contract to maintain the road will be included in works contracts, which also target up to 50% of the jobs provided for women. The project also includes a technical assistance grant of $1.5 million equivalent, financed from the Japan Fund for Poverty Reduction, to modernize and improve the Roads and Highways Department.

The project will be carried out over five years with an estimated completion date of December 2017. The OPEC Fund for International Development and the Abu Dhabi Fund for Development will each provide cofinancing loans of $30 million.