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