Bangladesh signs $ 1.13 billion deal with China for Dhaka-Ashulia highway
The 24-kilometer highway will be constructed from Shahjalal International Airport to the Dhaka Export Processing Zone near the Nabinagar-Chandra Highway via Abdullahpur, Ashulia and Baipail.
China will finance 65 percent of the estimated cost of the project under the preferential buyer credit. Bangladesh will have to repay within 20 years, with 2% interest and a five-year grace period.
“The important agreement was signed by correspondence between the two countries due to the COVID-19 pandemic,” Masuma Akter, deputy secretary in the Economic Relations Division, said Thursday.
Bangladesh first prepared and signed the documents, then sent them to China. Chinese authorities returned the papers on Tuesday after the signing, she said.
Md Shahriar Kader Siddiky, additional secretary at ERD, and Zhang Tiankin, deputy managing director of Exim Bank of China, signed the agreement, according to an ERD statement.
Usually, loans under the PBC facility have certain conditions, such as the purchase of products and services from the lender. ERD officials did not answer questions about these details of the deal.
Bangladesh and China signed memoranda of understanding worth around $ 21 billion to fund 27 projects during Chinese President Xi Jinping’s visit to Dhaka in 2016.
China has already signed agreements on a credit of 7.8 billion dollars for eight projects following the memoranda of understanding.
Thursday’s exchange rates put the latest deal at Tk94.72 billion. The estimated cost of the Dhaka-Ashulia highway project is over Tk 169 billion.
The government approved the project in October 2017 to reduce traffic congestion on the roads to 30 districts in the north and west. Construction was due to be completed in June 2022 but it took a long time to get the project off the ground due to the delay in signing the agreement with China.
The Minister of Road Transport and Bridges, Obaidul Quader, recently said that funding issues for the project had been resolved through communications with Chinese authorities. The minister opened the piles for the project last month.
He said the new deadline for the completion of the project has been set for June 2026.