The Asian Development Bank (ADB) has extended a loan of $150m to Bangladesh Railway (BR) to improve capacity, efficiency and safety of railway systems in the country.
The loan will be used to complete the double-tracking of the 64km line between Tongi and Bhairab Bazar.
The funding will also be used to improve signalling at 11 stations in the Darshana-Ishurdi section, as well as redevelop yards and extend loops in the Darshana-Sirajganj Bazar section.
ADB country director Teresa Kho said that reforms and infrastructural development will help increase container transportation by 10% and boost the number of daily trains in Tongi-Bhairab Bazar section by 25% until 2020.
"The improvement will result in low operating costs for users and increasing the competitiveness of Bangladesh for investment," Kho said.
The loan is part of the $430m multi-tranche financing facility agreed between the government and the ADB in 2006 to renovate the entire railway system.
According to the main agreement, the funds will be released in four tranches. ADB has already provided $130m for double-tracking the Tongi-Bhairab Bazar section, along with other improvements.
Upgrading the railway network is expected to reduce transport costs for the country’s major exports, which include ready-made garments.
The renovated railway system is also intended help ease the pressure on the country’s congested road network.