Bangladesh: South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program

Sovereign Project | 53260-001

The proposed SDP will improve the volume, efficiency, predictability, and security of cross-border trade in Bangladesh, which will contribute to the national goals of accelerating growth with industrialization and trade, and expanding subregional trade and commerce. To achieve this, the SDP will introduce policy reforms and complement these with upgraded infrastructure at border crossing points (BCPs). The program part of the SDP will support policy reforms to help Bangladesh comply with the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), and implement the Customs Modernization Strategic Action Plan, 2019-2022. The program part will support three reform areas: (i) compliance of customs legal framework with international standards, (ii) improvement of cargo clearance processes, and (iii) strengthening the capacity of customs agencies.

Project Details

  • Project Officer
    Hayashi, Tadateru
    South Asia Department
    Request for information
  • Country/Economy
    Bangladesh
  • Sector
    • Industry and trade
Project Name South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program
Project Number 53260-001
Country / Economy Bangladesh
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 4177-BAN: South Asia Subregional Economic Cooperation Integrated Trade Facilitation Program
Concessional ordinary capital resources lending US$ 90.00 million
Loan 4178-BAN: South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program
Concessional ordinary capital resources lending US$ 53.00 million
TA 6911-BAN: Supporting the South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program
Technical Assistance Special Fund US$ 1.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Private sector development
Sector / Subsector

Industry and trade / Industry and trade sector development - Trade and services

Gender Equity and Mainstreaming Some gender elements
Description The proposed SDP will improve the volume, efficiency, predictability, and security of cross-border trade in Bangladesh, which will contribute to the national goals of accelerating growth with industrialization and trade, and expanding subregional trade and commerce. To achieve this, the SDP will introduce policy reforms and complement these with upgraded infrastructure at border crossing points (BCPs). The program part of the SDP will support policy reforms to help Bangladesh comply with the World Trade Organization (WTO) Trade Facilitation Agreement (TFA), and implement the Customs Modernization Strategic Action Plan, 2019-2022. The program part will support three reform areas: (i) compliance of customs legal framework with international standards, (ii) improvement of cargo clearance processes, and (iii) strengthening the capacity of customs agencies. The PBL has two tranches: (i) tranche 1 involves formulating policies to strengthen regulatory and institutional arrangements, and capacities of customs agencies; and (ii) tranche 2 will implement the policies formulated under tranche 1. The project part of the SDP will upgrade infrastructure by (i) building integrated land customs stations (LCSs) and land ports (LPs); (ii) installing facilities and equipment for customs clearance and cargo transshipment operations; and (iii) operationalizing the facilities following the improved regulatory and institutional arrangements supported under the program part at Akhaura, Sonamasjid, and Tamabil BCPs. The project part will also design central customs facilities in Dhaka, and integrated trade facilities at Bibirbazar, Birol, Darshana, Sheora, Sonahat, and Teknaf BCPs for future investments. The SDP will contribute to climate adaptation and mitigation through climate-resilient infrastructure, streamlined cargo clearance processes, and facilitated transit arrangements.
Project Rationale and Linkage to Country/Regional Strategy

Performance in cross-border trade and binding constraints. Customs and other border clearance operations are inefficient and costly because of poor facilities at BCPs, excessive physical inspection of cargoes, and time-consuming documentation processes. Insufficient coordination between customs agencies of neighboring countries delays border clearance. Limited capacity of Bangladesh customs offices hinders sustained and holistic implementation of WTO TFA. The World Bank's Logistics Performance Index of 2018 indicated weaknesses in Bangladesh's customs operations and quality of infrastructure, resulting in an overall logistics performance index score of 2.58 out of 5, and a ranking of 100 out of 160 economies. Insufficient public investment and lack of coordination among government agencies have hindered the development of border infrastructure and clearance procedures to respond to growing trade and demand.

Border crossing facilities. While Bangladesh has 23 declared LPs at BCPs with India and Myanmar, the subregional trade accounts for only 10% of the total trade of Bangladesh. Most existing customs offices of the National Board of Revenue (NBR), and the cargo transshipment and storage facilities of the Bangladesh Land Port Authority (BLPA) are underdeveloped, and their capacity is insufficient to handle international cargoes. Cargoes have to wait a long time for customs clearance and cargo transshipment at the LPs. Time release survey of the Asian Development Bank (ADB) revealed that the average time required from entry to the LPs to exit from the LPs are about 4 hours for import and 3-6 hours for export at Akhaura, Sonamasjid, and Tamabil BCPs, 40%-60% of which are waiting time for subsequent steps. While SASEC corridors are being developed, border crossings remain as bottlenecks to subregional trade. Also, perishable goods cannot be traded under such slow and unpredictable operations by the existing trade facilities. Bangladesh needs to integrate customs clearance and cargo handling operations at BCPs by building well-equipped LCSs and modernizing LPs through the government's internal coordination of the NBR and BLPA to make cross-border trade faster, less costly, more predictable, and more secure so that trade with other SASEC countries will be expanded and diversified.

In 2020, international transit cargo operations started at Chattogram port, where almost all maritime cargoes of Bangladesh are handled. International cargoes unloaded at Chattogram port can be transported to the northeastern region of India through Bangladesh without customs clearance. This SDP will support expansion of the international transit cargo operation to the whole country. Improvement of integrated trade facilities at Akhaura, Sonamasjid, and Tamabil BCPs will enable cargo transportation between the northeastern region and other regions of India through Bangladesh, and also enable Bhutan, India, and Nepal to use Chattogram port for export and import. Chattogram port as well as Materbari port in Cox's Bazar, which is under construction, will be gateways for trade in the subregion.

Under the country partnership strategy for Bangladesh, 2021 2025, ADB will upgrade transport infrastructure, including SASEC corridors, across all modes to meet fast-growing transport and freight traffic demand, support trade routes, and yield maximum trade and economic benefits. In addition to the ongoing trade facilitation measures that focus on expediting trade and transit clearance, reducing transaction costs, and increasing compliance management efficiency, ADB will prioritize trade facilitation reforms and evolving initiatives that help sustain trade, particularly in critical goods, with due regard for public health and safety. Trade facilitation and customs modernization is one of the focus sectors of SASEC. The SASEC Trade Facilitation Strategic Framework adopted by the SASEC countries deals with priority areas such as customs modernization, cross-border facilities improvement, and institution and capacity building. This SDP aligns with the priority areas of ADB's country partnership and regional cooperation strategies.

Impact

Accelerated growth with industrialization and trade (Perspective Plan of Bangladesh, 2021-2041).

Expanded subregional trade and commerce (SASEC Vision: Powering Asia in the 21st Century).

Project Outcome
Description of Outcome Volume, efficiency, predictability, and security of cross-border trade in Bangladesh improved.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Customs legal framework complied with international standards.

Cargo clearance processes improved

Institutional capacity enhanced

Integrated trade facilities developed

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects No significant and irreversible environmental impacts are expected from the project part. The initial environmental examinations (IEEs) for Akhaura, Sonamasjid, and Tamabil BCPs, including an environmental management plan and environmental monitoring plan, were disclosed on 25 August 2021 on the ADB website. The anticipated environmental impacts during construction include (i) elevated public safety risks; (ii) worsened air quality, surface water quality, and public health; and (iii) worsened occupational health and safety. During project operation, residual environmental impacts are expected on air quality and noise because of the expected increase of cross-border traffic volumes. A grievance redress mechanism was prepared to deal with concerns during project construction. The IEEs have been prepared based on the preliminary design of LCSs and LPs. During the detailed design stage, the IEEs will be updated if necessary, and must be approved by the Department of Environment. Environmental monitoring report will be submitted to ADB semiannually during the construction and initial operation periods.
Involuntary Resettlement The civil works activities in the LCSs and LPs at Akhaura, Sonamasjid, and Tamabil BCPs will be confined within the government-owned premises. The due diligence documents and consultations with the NBR and BLPA indicate that land acquisition is not anticipated for the three project BCP locations, as all land is owned by the NBR or BLPA. At the Akhaura BCP, some of the land belonging to the NBR is used by local private establishments and households, and this land is currently the focus of a court case. The NBR has sufficient land to build the LCS facilities without use of the land under the court case.
Indigenous Peoples The proposed activities at Akhaura, Sonamasjid, and Tamabil BCPs will not entail impacts on indigenous peoples, as defined under ADB's Safeguard Policy Statement, and as confirmed during focus group discussions with the communities near the BCPs.
Stakeholder Communication, Participation, and Consultation
During Project Design Various information is provided to the public regarding the project, including scope, general progress status, beneficiaries, invitation for bids, and consultant recruitment notices. A website and communication platform are developed for the project. It contains information about the project design, its environmental and social impacts, the progress of civil works, and the implementation of environmental management plan. The communication strategy with various stakeholders will follow the public consultations and disclosure process under the environment safeguard.
During Project Implementation Stakeholder engagement will continue during project preparation and implementation. NBR and BLPA are committed to ensure all public consultations and information disclosure are undertaken meaningfully.
Business Opportunities
Consulting Services

Project Management Consultant. NBR will engage a consulting firm using the quality- and cost-based selection (QCBS) method with a standard quality-cost ratio of 90:10. An estimated 452 person-months (42 international, 410 national) of consulting services are required to (i) facilitate project management and implementation; (ii) supervise the civil works and goods installation in land customs stations at Akhaura, Sonamasjid, and Tamabil; and (iii) strengthen the institutional and operational capacity of NBR and BLPA.

Detailed Design Consultant. NBR will engage a consulting firm using the QCBS method with a standard quality-cost ratio of 90:10. An estimated 345 person-months (0 international, 345 national) of consulting services are required to prepare detailed designs of (i) the central customs facilities, including a central customs laboratory, a central customs warehouse, and a customs regional training academy in Dhaka, and (ii) integrated LCSs and LPs at other BCPs including Darshana, Birol, Sonahat, Sheora, Bibirbazar, Teknaf, and others, based on the engineering designs prepared by the project preparatory consultant engaged under TA 9879-BAN: SASEC Integrated Trade Facilitation Sector Development Program.

Internal Audit Consultants. NBR and BLPA will engage a consulting firm separately using the consultants' qualification selection. An estimated 12 person-months (0 international, 12 national) of consulting services are required to support internal audit of NBR and BLPA.

Procurement

Works. NBR will nationally advertise bidding for works to be conducted inside the existing NBR lands at Akhaura, Sonamasjid, and Tamabil. An integrated customs building with customs information technology equipment, a customs laboratory, a seizures warehouse, staff accommodation facilities and parking areas, and a power generator house will be built. Also, BLPA will nationally advertise bidding for works to be conducted inside the existing BLPA's lands at Akhaura and Tamabil. An administration building, a cargo transshipment dock with canopy, a temporary storage warehouse, an X-ray scanning facility, a weigh bridge, and a driver restroom and truck parking areas will be built.

Goods for LCSs and LPs. NBR will internationally advertise bidding for X-ray cargo scanners, radiation portable monitoring detectors, non-intrusive detectors, chemical detectors, and customs laboratory equipment; and nationally advertise bidding for closed circuit television system, computer devices, and office furniture at LCSs. BLPA will nationally advertise bidding for closed circuit television system, computer devices, and office furniture at LPs.

Goods for Project Administration. NBR and BLPA will purchase computer devices, office furniture and equipment, and personal protective equipment at PIU offices. Request for quotations will be used for purchase of goods worth less than $100,000.

Responsible ADB Officer Hayashi, Tadateru
Responsible ADB Department South Asia Department
Responsible ADB Division Regional Cooperation and Operations Coordination Div, SARD
Executing Agencies
Bangladesh Land Port Authority
Bangladesh Sthala Bandar Kartripaksha TCB Building, 1 Karwan Bazar
Bangladesh Railway
16 Abdul Gani Road
Bangladesh Railway, Rail Bhaban,
Dhaka, Bangladesh
Local Government Engineering Department
LGED Bhaban (Level 6), Agargaon
Sher-e-Bangla Nagar,
Dhaka 1207, Bangladesh
Ministry of Commerce
Government of the People's Republic of
Bangladesh
Ministry of Finance
Economic Relations Division (ERD), MOF
Sher-e-Bangla Nagar, Dhaka_1207
Bangladesh
Ministry of Road Transport and Bridges
The Roads and Highways Department
Dhaka, Bangladesh
Ministry of Shipping
Bldg #6, Bangladesh Secretariat
Dhaka 1000, Bangladesh
National Board of Revenue
Rajashwa Bhaban Segunbagicha, Dhaka 1000
Bangladesh
Roads and Highways Department
Sarak Bhaban
Tejgaon, Dhaka-1208
Bangladesh
Timetable
Concept Clearance 28 Nov 2019
Fact Finding 12 Apr 2021 to 16 May 2021
MRM -
Approval 31 Mar 2022
Last Review Mission -
Last PDS Update 31 Mar 2022

Loan 4177-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Mar 2022 15 Jun 2022 20 Jun 2022 31 Oct 2024 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 90.00 Cumulative Contract Awards
ADB 90.00 03 Aug 2022 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 03 Aug 2022 50.00 0.00 56%

Loan 4178-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Mar 2022 15 Jun 2022 20 Jun 2022 31 Dec 2026 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 61.04 Cumulative Contract Awards
ADB 53.00 03 Aug 2022 0.00 0.00 0%
Counterpart 8.04 Cumulative Disbursements
Cofinancing 0.00 03 Aug 2022 0.00 0.00 0%

TA 6911-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Mar 2022 - - 31 Mar 2025 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,500,000.00 0.00 0.00 0.00 0.00 0.00 1,500,000.00 03 Aug 2022 0.00

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Project Agreement for Loan 4178-BAN: South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program Project/Program Agreements Jun 2022
Loan Agreement (Ordinary Operations [Concessional]) for Loan 4177-BAN: South Asia Subregional Economic Cooperation Integrated Trade Facilitation Program Loan Agreement (Ordinary Resources) Jun 2022
Loan Agreement (Ordinary Operations [Concessional]) for Loan 4178-BAN: South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program Loan Agreement (Ordinary Resources) Jun 2022
South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program: Report and Recommendation of the President Reports and Recommendations of the President Mar 2022
Supporting the South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program: Technical Assistance Report Technical Assistance Reports Mar 2022
South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program: Procurement Plan Procurement Plans Jan 2022
South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program: Project Administration Manual Project/Program Administration Manual Jan 2022
South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program: Concept Paper Concept Papers Nov 2019
South Asia Subregional Economic Cooperation Integrated Trade Facilitation Sector Development Program: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Nov 2019

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

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

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