After four years, funding issue for Dhaka-Ashulia expressway goes

The government and Exim Bank of China Tuesday signed a $1.1 billion loan agreement for the construction of the Dhaka-Ashulia Elevated Expressway – an overhead motorway that will connect Gazipur's Chandra at the North Bengal Highway to Dhaka Airport, according to the Economic Relations Division.  

With the funding finalised, the work of the 24 km expressway that had been stalled for four years is expected to gain momentum, said the authorities.  

"Now test piling is going on. After recruitment and receiving equipment from China for the project site, the main physical work is likely to start in January next year," said Md Shahabuddin Khan, director of the expressway project.

The government-to-government Dhaka-Ashulia Expressway project was approved by the Executive Committee of the National Economic Council (Ecnec) in 2017 at a cost of Tk16,901 crore. China Exim Bank is to fund around $1.1 billion or Tk9,472cr as the government will bear the remaining amount from its own pocket.

Though the project was to be completed in 2022, the foreign funding issue held back the implementation, according to officials concerned.

"We are committed to completing the work within 2026," said the project director.       

An ERD release on Thursday said ERD Additional Secretary Md Shahriar Kader Siddiky and Exim Bank of China Deputy General Manager Zhang Tianqin signed the loan agreement. The loan interest rate is 2% while the repayment period is 20 years, including a five-year grace period.  

Wishing anonymity, project officials told The Business Standard that China Exim Bank had raised the loan interest rate to 3% although the bank in 2017 agreed to provide the money at a 2% premium. The interest hike prompted an implementation issue that was later resolved after prime minister Sheikh Hasina visited Beijing in 2019.

"Moreover, Exim Bank itself delayed in preparing the agreement as it received the go-ahead from the Chinese government in November last year," said an official privy to the project funding.            

The main objective of the project is to minimise traffic congestions in and around Dhaka and of Ashulia in its outskirts. The overhead expressway will be connected to the Dhaka Elevated Expressway that connects Dhaka airport with Dhaka's Jatrabari area.

By taking the two expressways, vehicles from districts in northern Bangladesh will be able to emerge on to the Dhaka-Chattogram and Dhaka-Sylhet highways without bothering the Dhaka traffic flow.  

Besides, the Dhaka-Ashulia expressway will help ease traffic congestion in the Abdullahpur-Ashulia-Bypail-Chandra corridor.

According to an estimate of the Bridges Division, the elevated expressway will make a 0.2% contribution to the gross domestic product (GDP) by facilitating transportation of exporting goods. ***