Asian Development Bank (ADB) will provide a credit of US$198m to support upgrading a critical regional highway and two land ports in Bangladesh, aimed at boosting connectivity and trade across South Asia.
ADB and Bangladesh signed the credit agreement on the South Asia Subregional Economic Cooperation (SASEC) Road Connectivity Project at Economic Relations Division in Dhaka on Wednesday.
The project will expand and improve a 70-kilometer section of the Dhaka-Northwest highways (Joydevpur–Chandra–Tangail–Elenga Road) the second busiest arterial route in the country.
The initiative will also upgrade land ports at Benapole and Burimari, which handle the bulk of goods transported between Bangladesh and India, and through India, with Bhutan and Nepal.
These upgrades will boost trade volumes, improve traffic flows and reduce the loss of perishable goods, said an ADB statement.
Studies show upgrading regional highways in Bangladesh will support the movement of about 18m tonnes of freight in Bhutan, India and Nepal, boosting intra-regional trade across South Asia.
“Upgrading this important section of the Dhaka-Northwest highways will give a big lift to both domestic and subregional trade, as well as encouraging more domestic and foreign investment,” said M. Teresa Kho, Country Director for ADB’s Bangladesh Resident Mission.
“The project is an integral part of the SASEC programme’s push to improve infrastructure and promote economic cooperation in one of the world’s most densely populated areas.”
The narrow two-lane highway currently suffers from serious congestion and high accident rates.
Expanding the route to four lanes, and introducing a separate lane for slow-moving vehicles will help ease bottlenecks, reduce crashes, and provide the nearly seven million people living in the area with new business opportunities and better access to markets, schools and other social services.
As a public-private partnership initiative, a five-year performance-based contract to maintain the road will be included in works contracts, which also target up to 50% of the jobs provided for women.
The project also includes a technical assistance grant of $1.5m equivalent, financed from the Japan Fund for Poverty Reduction, to modernise and improve the Roads and Highways Department.
The project will be carried out over five years and is scheduled to complete by December 2017. The OPEC Fund for International Development and the Abu Dhabi Fund for Development will each provide co-financing loans of $30m.
The SASEC program is an initiative of Bangladesh, Bhutan, India, and Nepal to build closer links that will spur growth and development across the sub-region.
Its work covers activities in sectors, including transport, trade, energy, the private sector, tourism and the environment.
ADB provides the program with supports, including project financing, technical assistance, and advice.
