The Karnaphuli tunnel project proposal is likely to be placed at the next meeting of cabinet committee on economic affairs, said officials.
Under the proposal, a commercial agreement between governments of Bangladesh and China will be signed this month.
The works to construct the 4.21km tunnel under the River Karnaphuli in Chittagong is expected to start by the end of 2015 and conclude in 2019.
This will be a government to government initiative project, and the contract will be inked between Bangladesh Bridge Authority and China Communications Construction Company Ltd (CCCC).
CCCC is also the consultant for construction of the proposed Karnaphuli tunnel.
Road Transport and Bridges Minister Obaidul Quader said the parties might strike the deal on June 29.
Officials apprehended that the project cost would increase by 9.26% compared to the negotiated price of the Bridges Division.
According to the proposal, the project cost will be about $1,005.80m and the construction is expected to be completed in 2019 taking four years time.
An amount of $705.80m will be spent on building infrastructures in the project site while the remaining part will be used in land acquisition, rehabilitation programme and hiring consultant.
The length of the tunnel will be 4.21 km while the west bank approach road is 740 metres and the east bank approach road 4,952 metres, the proposal cited.
The CCCC who conducted survey on four international tunnels and Padma Bridge revealed that the construction cost of the Karnaphuli tunnel might range from $770.43m to $1,806.17m.
The four international tunnels are Ottawa Tunnel in Canada, Tokyo Bay Aqua-Line in Japan, Dalian and Yantai tunnel and Yellow River tunnel in China. The dual two-lane tunnel will be first of its kind in Bangladesh and is expected to improve the Dhaka-Chittagong -Cox’s Bazar highway network.
In future, it could also be linked with the proposed Asian Highway Network, which is supposed to establish road communications with neighbouring Myanmar and India.
The Karnaphuli tunnel will attract downtown population in the east side and promote “One City and Two Towns” improvement model adopted by China’s largest city Shanghai.
The tunnel is also essential because heavy siltation on the Karnaphuli riverbed is a main problem for proper functioning of Chittagong Port and also for building new bridges.