Bangladesh: South Asia Subregional Economic Cooperation Chittagong-Cox's Bazar Railway Project, Phase 1

Sovereign Project | 46452-002 Status: Approved

Summary

The project will support the Government of Bangladesh in constructing the 102-kilometer (km) Dohazari-Cox's Bazar section of the Chittagong-Cox's Bazar railway corridor in southeastern Bangladesh. The government is rehabilitating the 47-km Chittagong-Dohazari section with its own funds. The project will also strengthen the capacity of Bangladesh Railway for project implementation management. The South Asia Subregional Economic Cooperation (SASEC) trade facilitation and transport working group endorsed the project at a meeting held in Tokyo on 26 November 2015.

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Procurement Documents


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Project Name South Asia Subregional Economic Cooperation Chittagong-Cox's Bazar Railway Project, Phase 1
Project Number 46452-002
Country Bangladesh
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
MFF Facility Concept 0094-BAN: South Asia Subregional Economic Cooperation Chittagong-Cox's Bazar Railway Project, Phase 1
Ordinary capital resources US$ 1,410.00 million
Concessional ordinary capital resources / Asian Development Fund US$ 90.00 million
TA 0094-BAN: Capacity Development for Project Implementation Management
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Sector / Subsector

Transport - Rail transport (non-urban) - Transport policies and institutional development

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

The project will support the Government of Bangladesh in constructing the 102-kilometer (km) Dohazari-Cox's Bazar section of the Chittagong-Cox's Bazar railway corridor in southeastern Bangladesh. The government is rehabilitating the 47-km Chittagong-Dohazari section with its own funds. The project will also strengthen the capacity of Bangladesh Railway for project implementation management. The South Asia Subregional Economic Cooperation (SASEC) trade facilitation and transport working group endorsed the project at a meeting held in Tokyo on 26 November 2015.

The government has requested for a multitranche financing facility (MFF) in an amount up to $1.5 billion from ADB's ordinary capital resources (OCR) and Special Fund resources to help finance the project. An MFF using the time-slicing approach is proposed as the modality to finance this large-scale stand-alone project through long-term works, goods and services, and consultant contracts. The project was fully appraised as part of the due diligence for the MFF, and each tranche will finance parts of this project. The MFF allows a long-term partnership with the government for policy dialogue and capacity development.

Project Rationale and Linkage to Country/Regional Strategy

Bangladesh has the potential to become a transport and transshipment center for the subregion. It borders India and Myanmar and is close to the landlocked countries of Bhutan and Nepal. Bangladesh is also located at the main corridor of the Trans-Asia Railway network linking South and Southeast Asia. Nonetheless, railways account for a low market share in subregional transport. Only 11.9% of Bangladesh''s imports from India (876,855 tons) and 1.1% of its exports to India (17,832 tons) in 2011 were transported by rail. Only one passenger train operating twice a week links Dhaka with Kolkata, India. On average, only one freight train per day crosses the border. Major constraints in subregional rail connectivity are the lack of connectivity between the rail networks, the differences between the track gauges in the member states, incompatibilities in rolling stock, limited line capacity and the overall condition of the rail network in Bangladesh.

The project will connect Cox''s Bazar district for the first time to the national and subregional railway network, and support efficient development in the Dhaka -Chittagong -Cox''s Bazar- Myanmar border corridor through improved, reliable, safe, and environmentally friendly railway connectivity, contributing to the overall development of the national economy. The railway corridor is part of the Trans-Asia Railway network and will facilitate access for the Cox''s Bazar district's population and products to subregional markets and trade. The project will improve connectivity toward Myanmar by intermodal facilities for passengers and freight transferring to road transport toward the Myanmar border. The project will be constructed in dual-gauge tracks to enable future direct connectivity toward western Bangladesh and India, where railways are constructed mostly in broad gauge, as well as toward northeastern India and Southeast Asia, where railways are mostly constructed in meter gauge.

Cox''s Bazar is being developed to become a major domestic and regional tourist destination. Tourism in Cox''s Bazar is expected to grow by at least 5% annually and the government intends to develop the district into a regional tourist hub and seaside resort, and other areas of the district and the Chittagong Hill Tracts into eco-tourist destinations. Developing tourism in Cox''s Bazar is expected to contribute significantly to the district's economic growth and create jobs in tourism and supporting industries. But tourists can travel to the district only by road via the two-lane national highway or on a very limited scale by air; most tourists use the bus and come from Bangladesh's urban centers, such as Dhaka (located 470 km north of Cox''s Bazar), Comilla, and Chittagong. Each year, around 1.875 million tourists visit Cox's Bazar and stay in the district's more than 200 hotels and numerous guesthouses and dormitories. Annually, more than 9 million bus trips are made to the district from Chittagong alone. It is expected that the railway will serve as an alternative mode of transport for about 50% of trips currently using buses. Through this modal shift from road to rail, the project will help reduce greenhouse gas emissions and improve road safety. Special tourist trains will be operated between Dhaka and Cox''s Bazar to accommodate the demand.

The proposed project will finance the construction of the 102 km Dohazari- Cox''s Bazar section as phase 1 of the planned improvement for the railway corridor. The Government of the Republic of Korea plans to finance the replacement of the road cum railway bridge over Karnaphuli River in Chittagong. The project design includes provisions for future capacity enhancement, and extensions of the line to Gundam at the Myanmar border and to the planned deep-sea port on Matarbari Island. These future extensions are expected to be financed under phase 2 of the proposed project. The dual-gauge conversion of the Dhaka Chittagon

Impact Efficient and safe railway transport in Bangladesh and improved subregional connectivity and trade

Project Outcome

Description of Outcome Railway transport system in the Chittagong-Cox's Bazar corridor improved
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

New railway line commissioned

Project implementation capacity of Bangladesh Railway strengthened

Status of Implementation Progress (Outputs, Activities, and Issues)
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.

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.

The Environment Expert will update and prepare (i) environmental categorization form and rapid environmental assessment checklist; and (ii) an environmental impact assessment (EIA) or initial environmental examination (IEE) in accordance with ADB's Safeguard Policy Statement (2009). The environmental considerations will require assessment of environmental improvement and/or emission reduction due to diversion of passenger and cargo traffic from roads to rail. The environmental analysis shall also include analysis of options for carbon financing for the subprojects.

Involuntary Resettlement

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.

The Resettlement Expert will prepare or update (i) involuntary resettlement (IR) screening and impact categorization checklists, (ii) indigenous peoples (IP) screening and categorization checklists. (iii) resettlement and indigenous peoples frameworks (iv) propose/design a mechanism for grievance redress in these frameworks as well as in safeguard plans, (v) undertake audit(s) of existing facilities, (vi) prepare resettlement plans (RP); and (vii) prepare indigenous peoples plans, if required, in accordance with ADB's Safeguard Policy Statement (2009), Government rules, regulations and policies and other related policies such as ADB's Public Communications Policy (2012). The scope shall include, but not be limited to, the following: (i) how the projects could avoid or reduce involuntary resettlement, (ii) the extent of physical and economic displacement expected, if any, by carrying 100% census of the displaced persons and preparing inventory of losses, (iii) whether indigenous peoples are present within or nearby the project areas, and if they will benefit from or be affected by the project, (iv) carry out meaningful consultations with all the stakeholders including displaced persons, and (v) recommend measures and organizational improvements in BR for implementation of the land acquisitions and RP and how to organize the monitoring and documentation of actions taken.

Indigenous Peoples

A poverty and social assessment will be prepared to assist in developing pro-poor design features, including issues related to participation, gender, labor, affordability, sexually transmitted diseases including HIV and other social risks. A mitigation plan will be prepared to address risks, if any, in compliance with ADB's Guidelines for Incorporation of Social Dimensions in Bank Operations (1994) and Handbook on Social Analysis (2007). The initial poverty and social assessment is in Appendix 4.

The Social Development Expert will prepare Poverty and Social Analysis (PSA) report in accordance with ADB's Handbook on Social Analysis (2007) and ADB's Poverty Handbook (2006). The scope shall include an in-depth social, poverty and gender analysis by providing a socioeconomic profile of the project influenced areas to assess local demand for the proposed investments, employment opportunities, child labor, gender specific capacity to take advantage of the likely socioeconomic opportunities that would result from the Project, HIV transmission and/or other health and safety risks, and to collect baseline data for monitoring social impacts.

Stakeholder Communication, Participation, and Consultation
During Project Design

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.

The project will help improve peoples access to and use of opportunities, services, resources and assets which will further empower them. Throughout the project cycle meaningful consultations will be held with the project beneficiaries providing them information regarding the project design and implementation. This will further empower the communities. The project will benefit all socio economic categories as they can easily commute from one place to another.

There are civil society organizations working in the area of health, microfinance, social welfare in the project influence area. The civil society organizations will be consulted while preparing the resettlement planning documents and poverty and social assessment.

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 All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). Two consulting firms will be recruited under the loan, namely for construction supervision and project management. For the construction supervision consulting contract, an estimated 4,056 person-months (653 international, 3,403 national) of consulting services are required; for the project management consulting contract, an estimated 1,860 national person-months of consulting services are required. Consulting firms will be engaged using the quality- and cost-based selection (QCBS) method with a standard quality cost ratio of 90:10. This is to ensure high quality of consulting firms recruited for the highly specialized tasks to supervise and manage a multidisciplinary greenfield railway project.
Procurement

All advance contracting and retroactive financing will be undertaken in conformity with ADB Procurement Guidelines (2015, as amended from time to time) and ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. The borrower and Bangladesh Railway have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the project.

Advance contracting will be carried out for goods and services, works, and consulting services.

Retroactive financing for eligible expenditures up to the equivalent of 20% of each ADB loan under the Facility, incurred before loan effectiveness, but not more than 12 months before the signing of the loan agreement.

Bangladesh Railway has adequate organizational and staff capacity to carry out procurement of goods, works and consulting services and strong experience with the procurement for government and donor-funded projects; Bangladesh Railway has also successfully completed recent works projects and hence, has good experience in contract management. All bids and proposals are evaluated by BR's Tender Evaluation Committee (TEC) and Proposals Evaluation Committee (PEC) comprising five qualified and experienced in-house members together with two external members from organizations outside the communication sector. The procurement approval process is well-defined and simplified and involves reasonable time till award of contracts. Bangladesh Railway has already established a PIU and appointed a project director for the project, who have initiated procurement steps under the advance contracting modality. ADB will play an active facilitation role in the bidding process to ensure timeliness and quality in the process, and will engage its own consultants to help with this work.

All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (2015, as amended from time to time). The civil works contract for construction of the Chittagong Cox's Bazar railway project will be procured in accordance with the international competitive bidding procedure with ADB's prior review of bid documents and major steps in the procurement process during bid evaluation. Supply contracts to continue supporting the implementation of the railway reform project will be procured in accordance with the international competitive bidding procedure with ADB's prior review of bid documents and major steps in the procurement process during bid evaluation.

Responsible Staff

Responsible ADB Officer Roesner, Markus
Responsible ADB Department South Asia Department
Responsible ADB Division Transport and Communications Division, SARD
Executing Agencies
Bangladesh Railway
16 Abdul Gani Road
Bangladesh Railway, Rail Bhaban,
Dhaka, Bangladesh

Timetable

Concept Clearance 18 Dec 2013
Fact Finding 31 Jan 2016 to 10 Feb 2016
MRM 01 Jun 2016
Approval 28 Sep 2016
Last Review Mission -
Last PDS Update 09 Nov 2016

MFF Facility Concept 0094-BAN

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1,801.00 Cumulative Contract Awards
ADB 1,501.00 - 0.00 0.00 %
Counterpart 300.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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