Vol. 5 Num 400 Tue. July 12, 2005  
Front Page

$500m investment plan for railways

The government plans to invest $500 million for restructuring the railway in view of the proposed investments of Tata Group, and also to revitalise the Chittagong port.

Finance and Planning Minister M Saifur Rahman yesterday said this against the backdrop of challenges facing state-owned Bangladesh Railway (BR) due to its dwindling passengers and shortfall in revenues.

He was talking to reporters following a meeting with representatives of the World Bank (WB) and the Asian Development Bank (ADB) at his Gulshan house.

The WB and ADB have jointly proposed to contribute a major portion of the investment, the minister said.

The donor agencies have expressed their willingness to assist the BR if it is corporatised besides being more service and market oriented. Saifur has also agreed to their proposal.

An inter-modal transport study will be conducted to assess the investment and analyse the future of the railway in context with other means of communications.

Saifur said the current structure of the BR is about 50 years old and it has almost become ineffective comparing to modern rail communications.

"Currently, no-one is concerned about the railway system," Saifur said, adding that ministers and lawmakers are very much busy with roads and highways, leaving the railway sector out of focus.

The railway should be given proper attention for the sake of transportation of containers from Chittagong port to the capital, he said.

"We must work for reforms of the railway as Tata would invest in Iswardi and they need raw materials from Chittagong port and West Bengal. Finished product will also be transported to West Bengal," the minister said.

He said the number of train passengers has already dropped on the key Dhaka-Sylhet route following improvement in road link between the divisions. The situation will worsen after the proposed four-lane Dhaka-Chittagong highway is complete, he added.

He said the restructuring of the railway is a must to ensure efficient management and make it accountable, transparent and profitable.

"We had a discussion on a whole range of issues, mostly project related issues like infrastructure of Bangladesh Railway," said Christine Wallich, country representative of the WB.

"Both the ADB and WB have been asked to work together to straighten the railway in Bangladesh," she added.

"We want to see some reforms taking place in the railway to make it more market oriented and service oriented, and corporatisation is an option that worked very well in some other countries," she said.

Earlier on July 7, the donors representatives met Communications Minister Nazmul Huda on the issue. But the minister turned down their proposal saying it cannot be implemented before the next general elections.

"The railway sector could not be benefited from the donors' proposals in the past," the minister said.