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ADB mandated to advise $400m expressway

Staff Correspondent
09 Dec 2022 00:00:00 | Update: 09 Dec 2022 00:02:03
ADB mandated to advise $400m expressway

Bangladesh has mandated ADB’s Office of Public–Private Partnership (OPPP) to provide transaction advice on the Joydebpur Mymensingh Road PPP project to be built along one of the country’s busiest economic corridors.

Making the disclosure on Thursday, an ADB press release pointed out that the project is expected to deliver local jobs and skills, as well as cut road congestion and improve road safety.

The scope of the mandate agreed with Bangladesh’s Public – Private Partnership Authority, which covers project feasibility, transaction due diligence and structuring, bidder procurement, and negotiation to reach commercial and financial closure.

The Roads and Highways Department of the Ministry of Road Transport and Bridges is the project’s implementing agency. Providing more details, Head of OPPP F Cleo Kawawaki said, “This project builds on OPPP’s successful track record in supporting the Government of Bangladesh in the road sector.

“This expressway will further demonstrate how the private sector’s innovation, efficiency, and capital can be leveraged to build climate resilient adaptable infrastructure. OPPP is focused on providing advice that assesses options to decarbonize the expressway and plan for future interventions like electric vehicle charging and innovative climate mitigation and adaptations.”

In addition to advising on the project, OPPP’s mandate will encompass capacity augmentation to identify a robust pipeline of new opportunities and monitor two other road PPP projects in Bangladesh – the Dhaka Bypass Road PPP project which achieved financial close in April 2021, and Rampura Amulia Demra PPP project which reached commercial close in January 2022.

These two projects are estimated to mobilise over $600 million of private sector capital, the press release read.

The project will convert the existing national highway-3, an 87-kilometer road connecting Joydebpur city at the outskirts of Dhaka to the northern district of Mymensingh, to a four-lane access-controlled expressway with service lanes on each side for local traffic.

Estimated initial capital expenditure is over $400 million. Project costs, construction and concession duration will be assessed as part of feasibility study. Construction should cause minimal disruption given the need to use the existing highway, which is expected to see a sharp increase in heavy vehicle traffic when the 10 economic zones connecting to it are operational. 

ADB’s advice will help ensure that the project maximizes gains in connectivity and logistics while helping rebalance regional disparities.

It will also explore private sector innovations and efficiencies to reduce congestion, improve traffic flow and safety, and deliver climate resilient and future-proofed infrastructure that accommodates electric vehicles, conserves rainwater, and reduces greenhouse gases.

The project is aligned with ADB’s country partnership strategy for Bangladesh, 2021-2025 which prioritises road transport, urban and water, and health for targeted PPP-related support.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members – 49 from the region.

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