ADB okays $360m loan to boost Bangladesh Railway

Asian Development Bank (ADB) has approved $360 million as loans to Bangladesh so the country can support its ongoing reform in the railway sector.

The money will also be used to buy modern rolling stock Bangladesh Railway and to promote an overall shift from roads to rail, the ADB said in a news release on its website today.

"Railways in Bangladesh potentially offer a cheaper, safer, and more fuel-efficient means of transport of goods and passengers than roads, but have been held back by lack of investment and aging and unreliable rolling stock," said Tsuneyuki Sakai, an ADB Senior Transport Specialist.

"The ADB Railway Rolling Stock Operations Improvement Project will boost the operational performance of Bangladesh Railway by introducing new technology, equipment, and processes that will be cleaner and more efficient, cutting carbon dioxide emissions," the news release adds.

This latest project seeks to address the investment and modernization needs of Bangladesh Railway. It will procure 40 broad gauge locomotives, 125 luggage vans, and 1,000 wagons for freight trains for use on major lines of the rail network. The rolling stock will introduce auxiliary power units (APU) to Bangladesh Railway, to significantly reduce diesel consumption when the locomotives are idling. The project will also draw up investment plans for urgently required maintenance facilities, establish training programs for the drivers, and run the enterprise-wide IT system, ADB said.

The total cost of the project is $453.37 million, of which $93.37 will be met by the government. It is due for completion around the end of June 2022, it added.