Bangladesh: SASEC Railway Connectivity Investment Program

Sovereign Project | 46452-002

Summary

The South Asia Subregional Economic Cooperation (SASEC) Railway Connectivity Investment Program (the investment program) will improve the performance of the railway sector in Bangladesh by implementing a series of infrastructure and rolling stock capacity improvement investments to overcome capacity bottlenecks in sections with subregional impact, e.g., the Dhaka Chittagong Cox's Bazar Myanmar Border and the Dhaka Ishurdi Indian Border corridors. The subprojects to be financed under the investment program were selected based on the priority investments identified in the Government's Railway Master Plan for 2010 2030 as important missing links or bottlenecks in the railway network in Bangladesh.

Latest Project Documents

Title Document Date
SASEC Railway Connectivity Investment Program Jan 2014

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Procurement Notices

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Procurement Documents

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Project Name SASEC Railway Connectivity Investment Program
Project Number 46452-002
Country Bangladesh
Project Status Proposed
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
MFF Facility Concept: SASEC Railway Connectivity Investment Program
Asian Development Fund US$ 56.00 million
Ordinary capital resources US$ 810.00 million
TA: Capacity Development for Accessing Climate Mitigation Benefits
Technical Assistance Special Fund US$ 400,000.00
Strategic Agendas
Drivers of Change
Sector / Subsector Transport - Rail transport (non-urban)
Gender Equity and Mainstreaming
Description

The South Asia Subregional Economic Cooperation (SASEC) Railway Connectivity Investment Program (the investment program) will improve the performance of the railway sector in Bangladesh by implementing a series of infrastructure and rolling stock capacity improvement investments to overcome capacity bottlenecks in sections with subregional impact, e.g., the Dhaka Chittagong Cox's Bazar Myanmar Border and the Dhaka Ishurdi Indian Border corridors. The subprojects to be financed under the investment program were selected based on the priority investments identified in the Government's Railway Master Plan for 2010 2030 as important missing links or bottlenecks in the railway network in Bangladesh.

The impact of the investment program will be improved domestic and subregional trade flow in Bangladesh. The outcome will be an improved railway transport system in Bangladesh. The outputs of the investment program are summarized in Table 1 and will be (i) about 300 km of railway infrastructure constructed and improved according to Trans Asia Railway standards, (ii) improved rolling stock maintenance capacity of BR resulting in an increase in rolling stock availability for revenue operation to 80% and (iii) improved capacity of BR in project management and implementation.

Project Rationale and Linkage to Country/Regional Strategy

Background. The market share of the railway in the subregional transport is low; only 11.9% of Bangladesh's imports from India of 876,855 tons and only 1.1% or 17,832 tons of exports from Bangladesh to India in 2011 have been transported by rail. For passengers, only one train operating three times a week links Dhaka with Kolkata in India and average, only one freight train per day crosses the border. Bangladesh Railway (BR) was operating 289 passenger and 48 freight trains per day in FY 2011/12 for the domestic market. Main reasons for the limited cross-border rail traffic are as follows: (i) due to different track gauges with Broad Gauge of 1,676 mm in Western Bangladesh and Meter Gauge of 1,000 mm in Eastern Bangladesh, all cargo between East and West Bangladesh has to be transshipped between different trains and passengers have to change trains; (ii) missing links in the railway network between Bangladesh and North-Eastern India as well as between Bangladesh and Myanmar; (iii) insufficient infrastructure not providing adequate capacity in the Ishurdi Dhaka Chittagong corridor to operate more domestic and subregional trains; (iv) load restrictions of Jamuna bridge prevent full loaded Broad Gauge trains to cross the bridge and reach Dhaka from India; (v) lack of a container transshipment facility near Dhaka with dual gauge access and high capacity to satisfy higher demand; and (vi) operational constraints such as the exclusive operation of block-trains for freight in India combined with the lack of containerization in the freight traffic between India and Bangladesh prevents the railways from access to the break-bulk cargo markets.

Chittagong Port handled 1.39 million twenty foot equivalent container units in 2011, with number increasing at about 10% per annum. The number of container transported by BR between Chittagong Port and Dhaka Inland Container Depot (ICD) has been stagnant in recent years and BR is now only transporting less than 10% of the container from Chittagong Port bound for Dhaka. Due to limitations in the line capacity of the Dhaka-Chittagong railway corridor as well as the saturated capacity of the existing ICD in Dhaka and container handling facilities in Chittagong Port, BR cannot increase its market share in this lucrative freight market or provide additional subregional container services.

Travelling by railway in Bangladesh is more safe, energy efficient, environment-friendly and reliable compared with other modes of transport. According to passenger surveys, railway transport is also considered more comfortable compared with long distance buses. Intercity (IC) trains operated by BR are very popular. Thus occupancy of IC trains is very high, especially in the east zone (98%); IC trains in the Dhaka Chittagong corridor are usually sold out. About 40% of BR's passengers travel by IC trains which account for more than 75% of passenger revenue. The high demand for IC service in the Dhaka Chittagong and Dhaka Ishurdi (Western Bangladesh) corridors cannot be fully met due to insufficient line capacity and rolling stock available, thus no additional trains can be scheduled to tap into a lucrative market for BR with high revenue potential. As Bangladesh's economy was growing by more than 6% in recent years, rising demand for domestic and subregional railway transport is expected, but cannot be satisfied with the existing limited infrastructure and rolling stock.

Strategic Context and MFF Road Map. The subprojects to be financed under the investment program (Table 1) were selected based on the priority investments identified in the Railway Master Plan for 2010 2030, the Government's road map for development in the railway sector. In addition, all subprojects are sections in the Trans Asian Railway network and included in the SAARC Multimodal Transport Study as sections of subregional corridors. The investment program was endorsed during the SASEC Trade Facilitation and Transport Working Group meeting in Singapore in October 2013 and is included in ADB's Regional Cooperation Operations Business Plan for South Asia (2013 2015). The Investment Program is in line with ADB's Country Partnership Strategy (CPS) for Bangladesh (2011 2015), which aims at reducing high transport and logistical cost to support sustainable and inclusive economic growth by connecting all parts of the country with national and regional markets. The investment program supports the key thematic drivers of the CPS for (i) environmental sustainability and climate resilience by climate-proofing infrastructure and minimizing carbon footprints; (ii) regional cooperation by investments conducive to subregional economic cooperation; (iii) private sector development by supporting implementation for public-private partnerships in the logistics and rolling stock maintenance subsectors; and (iv) partnerships by integrating cofinancing from development partners in the design of the long-term investment program.

Impact Improved domestic and subregional trade-flow in Bangladesh
Outcome Improved railway transport system in Bangladesh
Outputs

Constructed and improved railway infrastructure

Improved rolling stock maintenance system in place

Improved capacity of BR in project management and implementation

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects Studies to prepare this investment program will be undertaken by the TA loan and PPTA. The tasks include (i) assessing the environmental and social safeguard impact of the project, and (ii) preparing safeguard documentation for the project and review the safeguard categorization for the project. A resettlement framework, resettlement plans, an environmental assessment framework, an indigenous people framework and indigenous peoples plans, if required, will be prepared in accordance with the ADB s Safeguard Policy Statement (2009), government guidelines, regulations and policies. Estimates of emission reduction as a result of the investment program will be calculated and the potential for carbon-funding of subprojects under the Investment Program will be explored.
Involuntary Resettlement Studies to prepare this investment program will be undertaken by the TA loan and PPTA. The tasks include (i) assessing the environmental and social safeguard impact of the project, and (ii) preparing safeguard documentation for the project and review the safeguard categorization for the project. A resettlement framework, resettlement plans, an environmental assessment framework, an indigenous people framework and indigenous peoples plans, if required, will be prepared in accordance with the ADB s Safeguard Policy Statement (2009), government guidelines, regulations and policies. Estimates of emission reduction as a result of the investment program will be calculated and the potential for carbon-funding of subprojects under the Investment Program will be explored.
Indigenous Peoples Studies to prepare this investment program will be undertaken by the TA loan and PPTA. The tasks include (i) assessing the environmental and social safeguard impact of the project, and (ii) preparing safeguard documentation for the project and review the safeguard categorization for the project. A resettlement framework, resettlement plans, an environmental assessment framework, an indigenous people framework and indigenous peoples plans, if required, will be prepared in accordance with the ADB s Safeguard Policy Statement (2009), government guidelines, regulations and policies. Estimates of emission reduction as a result of the investment program will be calculated and the potential for carbon-funding of subprojects under the Investment Program will be explored.
Stakeholder Communication, Participation, and Consultation
During Project Design People from all the socio economic strata are meaningfully consulted during the preparatory phase. Community meetings and focus group discussions will be organized as part of the poverty and social analysis. The local consultative meetings will involve all relevant stakeholders including representatives of the poor and other socially excluded groups ( e.g., women, indigenous people, etc) to disseminate the information as well as to get the feedback about the project design and its potential impacts. Other key stakeholders such as the relevant line departments, local Government representatives and NGOs will also be consulted. Consultations will also be undertaken with the affected households and communities during the course of the census survey and socioeconomic survey for the preparation of the safeguards planning documents.
During Project Implementation Bangladesh Railway, various line departments, project beneficiaries, local communities in the project influence area, among others. The Projects will benefit the poor and the vulnerable by providing increased employment and market opportunities, improved means of transport and better access to social service facilities. In case any involuntary resettlement impacts are identified during the planning stage, these will also be mitigated through provisions in the Safeguard Policy Statement, national laws and policies. Most of the beneficiaries, especially the vulnerable and the women headed households, will be consulted during the resettlement planning stage and while conducting the poverty and social assessment.
Business Opportunities
Consulting Services An international consulting firm will be recruited by ADB according to its Guidelines on the Use of Consultants (2013, as amended from time to time). Consultants will be asked to submit simplified technical proposals, and the selection will be in accordance with ADB's quality- and cost-based selection method using a quality cost ratio of 90:10 due to the highly specialized knowledge in carbon financing for railways.
Procurement Procurement for contracts to be financed from the investment program will be carried out in accordance with ADB's Procurement Guidelines (2013, as amended from time to time). All contracts for civil works and procurement of goods will be procured through international competitive bidding procedures. ADB standard bidding documents for large works or plant (design, supply and install) with post qualification under the single-stage, two-envelope system will be adopted. Advance procurement action for civil works, goods and consulting services is proposed to enhance project readiness and ensure faster disbursement of the loan.
Responsible ADB Officer Markus Roesner
Responsible ADB Department South Asia Department
Responsible ADB Division Transport and Communications Division, SARD
Executing Agencies
Bangladesh Railway (BR)Railway Div., Ministry of Communication
Rail Bhavan, Abdul Gani Road
Dhaka, Bangladesh
Timetable
Concept Clearance 18 Dec 2013
Fact Finding 25 Apr 2016 to 30 Apr 2016
MRM 29 May 2016
Approval 30 Sep 2016
Last Review Mission -
Last PDS Update 31 Mar 2015
Title Document Type Document Date
SASEC Railway Connectivity Investment Program Initial Poverty and Social Analysis Jan 2014

Safeguard Documents

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Evaluation Documents

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