High-speed rail network: China seeks MoU ASAP

"I would not say such a project should not be initiated. But it depends. Such a project can be undertaken if the economic growth continues for the next six to seven years. But if the economy slips, then this amount of money itself could be a huge burden for the country."

— Transport expert Prof Moazzem Hossain

Following the instruction of Prime Minister Sheikh Hasina in October 2014, Bangladesh Railway carried out a feasibility study for constructing a high-speed rail network between Dhaka and Chattogram.

However, the project was apparently put on the back burner considering the huge amount of money -- Tk 93,35,0.93 crore ($1=Tk 84) -- required for its implementation.

In a recent development, China has proposed carrying out the project under the government-to-government-Public Private Partnership (PPP) framework, bringing it back into discussion.

The country has also selected China Railway Group Ltd (CREC), a state-run company, for implementing the project, which will cost more than three times the expenditure for Padma Bridge (Tk 30,193 crore).

Li Jiming, the Chinese ambassador to Bangladesh, in April wrote to Railways Minister Nurul Islam Sujan for signing a memorandum of understanding between CREC and BR "as soon as possible".

Moreover, the ambassador expected that an MoU would be inked between the two governments in "near future" to embark on the high-speed rail project under the G2G-PPP framework.

Under the G2G-PPP arrangement, Bangladesh may request other governments to provide financial support and select state-owned or private entities to act as the investors.

No project under the G2G-PPP arrangement has yet to be implemented in Bangladesh. Discussions with several countries, including Japan and South Korea, have been going on to implement some projects under this model.

The Chinese proposal came at a time when prominent transport experts questioned the viability of such a huge-investment project. Some of them said BR lacks capacity to complete this "highly ambitious" scheme.

Even, the railways minister himself told The Daily Star last year that the government would "go slow" with the project due to the massive cost involved.

"Instead of investing the huge amount of money for the high-speed railway, we found investment in other projects is more crucial … We are giving emphasis on other infrastructure projects," Sujan said on October 31.

In March this year, the project evaluation committee led by the rail secretary decided to seek opinions from the railways minister whether BR will send the DPP of the proposed project to the Economic Relations Division for funds.

The Daily Star could not confirm if the committee took the steps as the minister, secretary and additional secretary (development and planning) were not available for comments.

According to the International Union of Railways, speed of the high-speed rail would be at least 200km per hour for upgraded tracks and 250km per hour or faster for new tracks.

The world's fastest public train connects Shanghai's Pudong airport of China's Shanghai with Longyang Road Station in the city centre and it has a maximum commercial speed of 460km/hr, says a CNN report of December last year.

The 10 fastest trains of the world are being operated at 300 to 460km/hr in China, Japan, Germany, France, Japan, Morocco, Spain, South Korea, Italy and Saudi Arabia, according to the report.

The work for India's first high-speed train project is underway between Mumbai and Ahmedabad and the bullet train will be operated at a speed of 320km/hr, according to Indian newspapers.

In Bangladesh, once the high-speed rail project is implemented, the journey on the 224.64km route between Dhaka and Chattogram via Narayanganj-Cumilla-Feni will take 55 minutes if uninterrupted, and 73 minutes with stopovers. The travel time is currently more than six hours.

It will, however, not be cheap. With the fare expected to be over Tk 2,000, more than three times the fare of an AC seat on existing Bangladeshi inter-city trains. Minimum air fare from Dhaka to Chattogram is Tk 3500.

Approximately 50,000 passengers will be transported each way daily while the bullet train will run at up to 300km/hr.

THE PROJECT

Sheikh Hasina, while visiting the railways ministry on October 23, 2014, issued several instructions, including taking steps for operating high-speed train (bullet train) between Dhaka and Chattogram.

More than 90 percent of the country's seaborne trade is being handled by the Chattogram port.

Dhaka-Chattogram highway is considered the life line of the economy as it carries more than 80 percent of the external trade but the contribution of the railways is very low compared to this.

Following the PM's instruction, BR has already completed a feasibility study and detail design of the project, spending Tk 110.16 crore. A joint-venture firm led by a Chinese company carried out the study and opined that the project would be economically viable with economic international rate of return is 15.18 percent.

If implemented, it will be the second costliest infrastructure project of the country after the Rooppur Nuclear Power Plant being built at Tk 113,092 crore.

Apart from CREC, two other Chinese companies -- China Railway Construction Corporation and China Civil Engineering Construction Corporation -- expressed interest in forming a joint venture to construct, operate and manage funds for the high-speed rail project under a PPP model.

BR held a meeting over the joint venture proposal in March last year and decided to seek opinion from the Economic Relations Division in this regard. However, no visible move followed.

Transport expert Prof Moazzem Hossain thinks this is an "ambitious project" with some extent of risk, if the country's present economic situation is taken into consideration.

"I would not say such a project should not be initiated. But it depends. Such a project can be undertaken if the economic growth continues for the next six to seven years. But if the economy slips, then this amount of money itself could be a huge burden for the country," he said.

"In that sense, it is a risky project," he told The Daily Star on May 21.

Replying to another question, he said, "Consequence would be same -- be it an investment project with [foreign] loan or under PPP. Ultimately, the government has to bear the liability."

SIGN MOU ASAP: CHINESE ENVOY

In his letter to the railways minister, Chinese ambassador mentioned a virtual meeting held between them on October 14, 2020, when "a preliminary agreement" for the project implementation through G2G-PPP was reached between two sides.

He said CREC has submitted its "letter of interest" to the ministry recently to develop the high-speed rail project.

CREC is involved in the Padma Bridge Rail Link Project and Chattogram-Cox's Bazar Rail Link Project, two fast-track projects implemented by BR.

The contractor of Padma Bridge is also a subsidiary of CREC.

CREC is the leading company for design and construction of railway in the word and the company is active in Bangladesh since 1990s, the ambassador said.

The ambassador termed CREC an "ideal partner" of railways ministry for implementing the project and suggested an MoU be signed for cooperation on the project between BR and CREC as soon as possible."

He requested the ministry to provide "needful supports" to CREC to facilitate the feasibility study, financing construction and operation of the project.

The ambassador also wrote that with the MoU on G2G-PPP between China and Bangladesh being signed in the near future, "we can surely expect" that the project would be developed under the G2G-PPP framework.

BR sources said the if CREC is given the charge of the project implementation, they will prepare a plan to use the high-speed corridor for operating freight trains, besides passenger trains, by lowering the speed at around 200km/hr.

Upon receiving the letter, the railways minister sought BR's opinion over the matter and BR recently sent their opinion, sources said.

Contacted, Habibur Rahman, additional secretary (development and planning), asked this correspondent to talk to a BR official.

The official said they informed the ministry that no such MoU is required to be signed with the company as the Public Private Partnership Authority (PPPA) has specific procedures regarding G2G-PPP framework.

This correspondent tried to talk with Railways Secretary Humayun Kabir going to his office on May 25 but could not manage an appointment. The secretary could not be reached over phone either.

He tried to meet the railways minister in his office the next day but to no avail. The minister was also not available on phone.