Japan has agreed to provide loans for Bangladesh to build its first underground railroad. A stretch of 26.6-kilometre rail line will be constructed in Dhaka in two phases under the Mass Rapid Transit project.
The design of the underground rail is being prepared, said Project Director Md Saidul Haque.
"Japan has agreed to finance the project which is a big one," he told bdnews24. com.
Haque hoped the tender process of the project will be finished by the end of this year after finalising the finance contract with Japan.
Bangladesh is likely to finalise the 40th loan package with the Japan International Cooperation Agency in June, said Shahidul Islam, additional secretary of the Economic Relations Division.
According to the contract, Bangladesh will get $2.5 billion which will be spent for five projects including the MRT-1.
This financial assistance of Japan will be more than those it gave in previous fiscal years. The interest rate will be 0.95 percent and the loan has to be repaid within 30 years.
In 2017, JICA gave 5.59 billion yen in loans under its 38th loan package to recruit an adviser for the project.
Two fact-finding teams of JICA visited Bangladesh in July and September and the delegates agreed to include the MRT-1 project in the 40th loan package.
The first part of the MRT-1 project will be the airport route. It will stretch from the terminal 3 of Shahjalal International Airport to Kamalapur via Khilkhet, Jamuna Future Park, Notun Bazar, Badda, Hatirjheel, Rampura, Malibagh and Razarbagh. It will be 16.4 kilometres long.
The second part of the underground rail will be the Purbachal route. It will stretch from Notun Bazar to Purbachal Depot via Jamuna Future Park. This route will cover 10.2 kilometres.
Dhaka Mass Transit Company will implement the project.
The final cost of the project is yet to be decided as the detailed project plan has not been finished, ERD Joint Secretary Abdul Baki told bdnews24.com. The DPP will be finalised "soon" and an estimated expenditure will be available then, he said.
In a JICA survey last year, $4.91 billion was estimated to be the average expenditure of the MRT-1 project with 2025 as the implementation deadline.
“Japan always finished the development projects it started in Bangladesh. For its part, the government provided funds to match the loans,” said Joint Secretary Abdul Baki.
Apart from the MRT-1 project, the JICA’s 40th loan package includes Matarbari coal power plant and Matarbari seaport.