Home ›› 18 Nov 2021 ›› Front
IM Power Plc, a UK-based company, has expressed its interest to invest about $4 billion in Bangladesh in high-speed rail and energy sectors.
Its Chairman Gordon Dickie already placed details in the project proposal to Bangladesh.
Under the investment consortium, Worley Group, Wood Group, Siemens Plc, British Steel, Pandrol Limited will jointly work with IM Power.
A delegation led by Railway Minister Md Nurual Islam Sujan will is expected to visit the United Kingdom on November 23. During the visit, the delegation will hold a meeting with IM Power and discuss the issue in detail.
Other delegation members include Railway Secretary Md Selim Reza and six high officials of the ministry.
In the first phase, the total investment has been estimated at $3.75 billion. The figure includes the track costs of $560,000 per km.
IMP will provide a finance package to cover 100 per cent of the capital cost of the project and its components, together with the cost of equipment for the LNG fuel supply.
The project is envisaged to be economically and commercially sustainable. So, it can be financed through multi-laterals, Export Credit Agencies and commercial banks.
“To improve railways, Bangladesh needs both investment and technological support. We’re working to attract Foreign Direct Investment (FDI) to strengthen our connectivity and capacity,” the railway minister told the Business Post.
“IM Power proposed to work with Bangladesh in developing the railway connectivity and cargo train. We’ll review the proposal to consider. If it suits our priority, then it would be taken into account,” he said.
“During the visit to the UK, we’ll hold a meeting with IM Power and discuss the issues broadly,” said Sujan.
The delegation will also meet other potential investors and technology suppliers to seek support from them to improve rail connectivity in Bangladesh.
According to the proposal, the consortium would build double-track freight and passenger rail line from Payra port to Dhaka in the first phase. To ensure an uninterrupted power supply to the rail system it proposed setting up 500 MW LNG fired power.
It also proposed to finance set up four track passengers and cargo rail in the second Padma Bridge, where the investment size would be about $7 billion.
On top of that, in the second phase, it would want to develop a double track freight rail from Dhaka dry port to Matarbari port via Chattogram port.
Besides, another double track for high-speed passenger rail from Dhaka to Cox’s bazaar via Cumilla, Feni and Chattogram.
The travel time on the high-speed train from Dhaka to Cox’s bazaar will drastically cut to 62 minutes instead of the existing several hours, once the project is completed.
Funding for the high-speed passenger line will come from ticket sales at a discount rate compared to the airfare. However, there may be a need for a subsidy to encourage people to travel by train instead of using road transport.
While developing the commercial opportunities around the location of stations, there will be a sum of approximately $150 million to co-invest with local developers in regeneration projects including offices and retail outlets.
IM Power would develop the project by forming a joint venture with a local company to own the project and manage the development of the port and rail system under a 50-year concession from the government of Bangladesh.
UK is the second largest foreign direct investor in Bangladesh with $407 million in FY21 after Singapore.
Bilateral trade between Bangladesh and UK stood at $4.11 billion in fiscal 2020-21. Bangladesh’s exports to the UK were $3.75 billion, while UK exports to Bangladesh amounted to $360 during the period, according to Bangladesh Bank.
