Bangladesh ends $1.5bn Chinese rail upgrade after nine years of talks

Srimangal station on the metre-gauge Akhaura–Sylhet line (Nicolas De Corte/Dreamstime)
Bangladesh Railway (BR) has cancelled a rail upgrade scheme in the northeast of the country after talks with a Chinese contractor that dragged on for nine years, local newspaper The Financial Express reports.

The metre-gauge line runs between the town of Akhaura and the city of Sylhet. The government wanted to add a standard gauge track to increase capacity.

It began talks with China Railway Construction Bridge Engineering Bureau Group, a subsidiary of China Railway Construction Corporation, and signed a preliminary agreement in 2015.

The Chinese company offered to carry out the work for $1.5bn, backed up by a government-to-government loan for two-thirds of the cost.

Bangladesh’s Cabinet Committee on Economic Affairs approved the project in April 2019.

But the government had second thoughts the following October, and requested a 21% cut in the cost.

The Chinese company made a counter offer in 2022 to cut costs by up to 6%. BR reportedly explored alternative funding sources, but the Chinese ambassador to Bangladesh urged the government to resume negotiations with the original company.

After lengthy discussions of this offer, the Ministry of Railways has now taken the project from its annual development programme.

A BR official who wished to remain anonymous told The Financial Express that the company had always advocated developing a new line instead of converting the existing one.

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