Dhaka: The Executive Committee of the National Economic Council (ECNEC) of Bangladesh on Tuesday approved a revised project worth Tk 3,801.61 crore to build a new railway track from Khulna to Mongla Port following a feasibility study.
The project will be partly financed out of the Indian line-of-credit, the $1 billion low-interest loan offered by the last Indian government to Dhaka to implement infrastructure projects that would ultimately aid connectivity between the two nations. The revised project will cost double the original.
The approval came from the 29th ECNEC meeting of the current fiscal held at the NEC conference room in the city’s Sher-e-Bangla Nagar area with NEC chairperson and Prime Minister Sheikh Hasina in the chair.
The estimated cost of Khulna-Mongla rail project, to be financed by the Indian government, has more than doubled in last five years. The project cost was estimated to be Tk 17.21 billion when it was first approved in 2010.
But ECNEC on Tuesday revised the cost to Tk 38.02 billion, 121 percent more than its first estimate.
India will extend Tk 23.71 billion in loan and the government will fund the rest 14.31 billion for the project.
Prime Minister Sheikh Hasina presided over the ECNEC (Executive Committee of the National Economic Council) meeting.
Bangladesh Railway will implement the project by June 2018.
After the meeting, Planning Minister AHM Mustafa Kamal gave reasons for the cost overrun.
“A 717-metre rail bridge has to be constructed on the river Rupsha due to change in the alignment of the rail tracks. The length of the rail track has increased by 12 kilometres,” he said.
“Apart from that, some more land has to be acquired.”
The minister said around 65-kilometre broad-gauge rail tracks and 21-kilometre loop-line would be constructed.
Of the total outlay, Tk 22 billion will be spent on construction of the rail tracks and bridge, Tk 10 billion on acquisition of 678 acres of land and the rest will be incurred on other heads.
The ECNEC meeting also approved a project for construction of rail tracks from Kulaurha to Shahbazpur in Moulvibazar with financial support from India.
Kamal said the government had decided to resume rail links between Kulaurha and Shahbazpur, and for that, the Tk 6.78-billion project had been approved.
According to the project paper, the Indian government will provide Tk 5.56 billion in loan for the implementation of the project while Bangladesh will arrange the remaining Tk 1.22 billion.
New Delhi had signed a deal with Dhaka during Prime Minister Sheikh Hasina’s visit to India in 2010 to give Bangladesh $1 billion in loan at 1 percent interest rate.
The loan money is being spent on 15 projects, including two in the railway sector.
The Indian government has endorsed use of $200 million of the loan package in construction of the Padma Bridge.
India has also agreed to give Bangladesh another $62 million in loan as more money is needed for completion of the projects under implementation.