Bhanga-Payra Rail Link project: Railway asks Providus about investment process
An opinion of the Australian High Commissioner in Bangladesh has also been sought
The Bangladesh Railway has sought to know about three issues, including the method of investment, from Australian investor Providus Investment which is interested in investing in the Bhanga-Payra Rail Link project.
Railway authorities have asked for a clarification of the method of investment, if the investment would be under direct procurement method or open tender method and to have an opinion of the Australian High Commissioner in Bangladesh.
Earlier, Providus offered a $16-billion-loan proposal for the Bhanga-Payra Rail Link and Dhaka-Chattogram High-Speed Train project.
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On 29 September, the railway ministry sent these queries to the Economic Relations Division (ERD) of the finance ministry. The ERD will forward the queries to the Australian investor through the Bangladeshi High Commission in Australia, said Railway Secretary Md Selim Reza.
The Business Standard published a report titled "Australian firm offers $16bn loans for high-speed rail projects" on 24 March.
The loan to be collected through the bespoke capital raising process has to be repaid within 30 years. Both parties have claimed that the interest rate would be the lowest in the two mega projects compared to any projects in the past.
These two projects are among some mega projects taken by the government aiming to modernise Bangladesh Railway, said sources.
Land acquisition and implementation costs of the two projects have been estimated at $15.8 billion – $4.4 billion for Bhanga-Payra Rail Link and $11.4 billion for the Dhaka-Chattogram High-Speed Train project.
Providus will arrange the fund and facilitate the entire loan amount of the project through international debt capital market..
Representatives of the investor company had a meeting with railway higher authorities in March.
Bhanga-Payra Rail Link project will be 213.3 kilometres of which Bhanga to Payra port rail line will be 189.5 kilometres.
The project will connect seven districts through railway – Faridpur, Gopalganj, Madaripur, Barishal, Jhalokati, Barguna and Patuakhali.
Providus has also offered $32 billion in loans in the Dhaka subway project. Besides, the investor has expressed interest in funding the energy, communication, education and socioeconomic projects of Bangladesh.
