ADB to Help Upgrade the Dhaka-Northwest International Trade Corridor
24 October 2017
The Asian Development Bank (ADB) has approved $1.2 billion financing support for the second phase upgrade of the Dhaka-Northwest international trade corridor, Bangladesh’s second busiest arterial road, on 24 October 2017.
This international trade corridor along the South Asian Association for Regional Cooperation highways 4 and 8 is a top priority of the Government of Bangladesh. Upgrading this corridor will improve transport access to the Burimari Land Port, which links Bangladesh to Bhutan through India, potentially increasing trade.
Expected outputs of the project include:
- Upgraded Dhaka–Northwest international trade corridor (Elenga–Hatikumrul–Rangpur);
- Enhanced institutional capacity of the Roads and Highways Department (RHD) for road operation and management; and
- Stronger road safety and gender-responsive features, and financed cost overrun for phase 1 of the Dhaka–Northwest international trade corridor (Joydeypur–Chandra–Tangail–Elenga).
According to Mr. Dong Kyu Lee, Unit Head, Project Administration, ADB South Asia Department, Bangladesh has good prospects to become a regional trade hub, if the country’s transport infrastructure can be improved to bring down transport costs and make the sector more competitive.
ADB financial assistance will be delivered through a multitranche financing facility, with the first tranche comprising a regular loan of $250 million and a concessional loan of $50 million. Work will be carried out over 10 years until August 2027, with funding from three more tranches from the facility at intervals.
A proposed ADB technical assistance grant of $2 million will complement this financing plan, to support the government in updating Bangladesh’s Road Master Plan, and enhancing planning and monitoring activities associated with roads.
In 2012, ADB approved the $198 million Bangladesh SASEC Road Connectivity Project, phase 1 of the international corridor project in Bangladesh. This increased road capacity on 70 kilometers of the Joydeypur-Elenga section of the road, and improved operational efficiency of the Burimari and Benapole land ports, which provide gateways to Bhutan and India.
Transport infrastructure is the centerpiece of the ADB-supported South Asia Subregional Economic Cooperation (SASEC) program, which promotes regional prosperity. Since 2001, SASEC members have invested more than $9.17 billion in projects with a regional dimension, including 31 transport projects worth $7.3 billion. SASEC transport investments in Bangladesh focus on developing highway corridors.