The government plans to sign a memorandum of understanding with China for the construction work in three mega-infrastructure road projects, including Dhaka-Chittagong Elevated Expressway, involving billions of dollars, New Age reports.
The two other projects are the construction of a new 6-lane Dhaka-Chittagong expressway and to widen the existing 2-lane Dhaka–Sylhet highway to a 4-lane highway, sources close to New Age said.
China has assured the proposed fund to finance the projects as concessional loan on government-to-government basis, a senior official at the Road Transport and Highways Division said.
Last week, China Harbour Engineering Co Ltd, a state-owned Chinese company, submitted a memorandum of understanding to the ministry of road transport and bridges after being asked by the ministry high-ups.
Before submission of the memo, a meeting between CHEC and ministry officials decided to go ahead with the Chinese proposal to take up three major road infrastructure projects, likely to become the economic lifeline for the country’s business and economy, sources said.
Road transport and highways division under the ministry of road transport and bridges okayed the draft memo and sent the instrument to economic relations division under the finance ministry for their approval, as the division is mandated to negotiate foreign loans and assistances.
‘We are ready to sign the MoU with CHEC if the ERD gives the green signal,’ MAN Siddique, secretary for Road Transport and Highways Division, told New Age on Friday.
He said the non-binding memo to construct three large projects would be followed by negotiations on terms and conditions for the proposed Chinese concessional loans, and of course estimation of costs to implement the much-need design and construction under the latest infrastructure scheme.
The Secretary said the volume of vehicles has been on rise on the Dhaka-Chittagong and Dhaka-Sylhet highways, which prompted the policy makers to expand the road facilities on the route through different modes.
Currently, an average traffic volume of 30,000 per day ply the Dhaka-Chittagong highway, which might increase to 120,000 per day by the next 10 years, according to a recent study of Japan International Cooperation Agency.
The MoU said the CHEC will be responsible to finance the project, doing feasibility study and project design.
The fund to construct the three projects will be made available on a government to government basis, the MoU said.
‘Whereas, the second party(CHEC) after having been satisfied with the objective of the projects, have expressed their willingness to conduct in the implementation of the projects and assist in the sourcing of the finances from Banks of China on a government to government (G2G) basis’ the memo reads.
The MoU, elaborating on financing the project, said, ‘the second party shall be solely responsible for the entire costs and expenses relating to the projects in compliance of prevailing rules and standard procedures of Bangladesh and China.’
‘The second party will arrange all sorts of funds for the execution of the projects.’
The terms and interest for the loans will be finalised through negotiations.
The MoU said rates of different components on procurement, construction and engineering will be fixed up by Bangladesh government, while rules and regulations of Bangladesh government and Banks of China will be the yardsticks to implement the project.
The second party will prepare both technical and commercial proposals for each of three components of the project, the memo said further.
The MoU will be signed for one year.
Officials at the ERD said they were examining the proposal, which might take another two weeks to complete.
‘The move is pretty good in terms of available low-cost foreign funds to improve road infrastructure of the country,’ a senior ERD official said.
