Dhaka-Ashulia expressway loan deal stuck for 4yrs

Even after four years, Bangladesh has not been able to sign the loan agreement with Chinese government to start construction of Dhaka-Ashulia Elevated Expressway.

In 2017, Bangladesh Bridge Authority signed an agreement with China National Machinery Import and Export Corporation (CMC) to construct the 26km-long expressway.

The project will be implemented under a government-to-government (G2G) agreement with China at a total cost of Tk 16,901 crore. Of the total cost, China Exim Bank will to provide Tk 9,130 crore as loan and the rest will be provided by the Bangladesh government.

According to the G2G agreement, CMC took the task of managing the loan, which was committed by the China during President Xi Jinping’s visit to Bangladesh in 2016, for the project.

However, CMC could not secure the loan for the project from till November last year, delaying the project for more than three years.

Although the Chinese bank approved the loan of Tk 9,130 in November, Bangladesh received a draft of loan agreement in April this year.

Concerned authorities in Bangladesh reviewed the draft loan agreement and then finalized the new draft, which received the green signal from the Prime Minister’s Office (PMO) in September, said Shahabuddin Khan, the project director of the Dhaka-Ashulia Elevated Expressway.

“There was a dispute over the interest rate on the loan. China Exim Bank wanted 3 per cent interest rate but we said it has to be at 2 per cent. And in 2019, it is fixed at 2 per cent following our prime minister’s visit to China,” he said.

“Everything is okay now. A draft of the loan agreement has been finalized after adding opinions from concern authorities and vetting from the law ministry. The PMO has approved the new draft. The agreement will be signed very soon,” Shahabuddin added.

The secretary to the Economic Relations Division (ERD) under the Ministry of Finance has been authorized for sign the agreement on behalf of Bangladesh.

However, Md Shahriar Kader Siddiky, additional secretary and wing chief for Asia, JEC and F&F at the Economic Relation Division (ERD), said now it is up to Chinese authorities to take the project forward.

“We are pushing the process forward. We have already sent letters to the Chinese government. Now, it is up to them to finalise the draft. I have nothing more to say before finalisation of the process,” said Shahriar.

“They will let us know after finalize their part. The process is yet to come to a finish,” he concluded.

As per design, the expressway will start from the North Bengal highway at Chandra and connect with the Dhaka Elevated Expressway from Hazrat Shahjalal International Airport point.

Under the project, 14.28km of four-lane roads, 10.83km of ramps, two 1.95km long flyovers, and 18km of drains on both sides of the expressway will be constructed.

Apart from the loan agreement, the project also has other issues to deal with before starting the construction.

The project’s utility relocation process has not been finalized yet and it is yet to receive a no objection certificate from the Bangladesh Railways to allow use of three kilometer of its land needed as per the alignment of the expressway.

“Loans can be delayed for many reasons. Before disbursement of the money, the bank needs to be assured that the project is fully ready for start construction. Many other government departments are connected to the project as some have to sacrifice their land while others may have to relocate their facilities from the project area,” Zahid Hussain, former lead economist of World Bank, told The Business Post.

“Design and alignment have to be finalized. Before fixing all the matters, any bank will hesitate to sign the agreement,” he added.

Project Director Shahabuddin said that the expressway will help easy traffic congestions significantly in the areas and boast import-export activities through maritime ports as Dhaka Export Processing Zone and other industries in Ashulia area will use this thruway.

“We need cooperation from all the departments involved with this project,” he added.