Bangladesh is expecting at least $21 billion South Korean investment in big infrastructure and other projects, including the country's maiden subway and the Dhaka Circular Railway, under public-private partnership (PPP).
A high-level South Korean delegation was supposed to visit Dhaka this week but cancelled the tour because of the sudden surge in Covid-19 pandemic in Bangladesh and elsewhere in the world.
It has told the Bangladesh authorities that they will move forward talks virtually.
In April 2019, the Public Private Partnership (PPP) Authority of Bangladesh and the Korea Overseas Infrastructure and Urban Development Corporation (KIND) – an investment facilitator of the South Korean government – signed a Memorandum of Understanding on public-private investment. The joint venture has so far identified at least two dozens of projects for potential funding.
The Korean team will meet the PPP Authority and the implementing agencies of the seven proposed infrastructure projects virtually, PPP Authority officials told The Business Standard.
Hankyu LIM, executive vice president of the KIND, would lead the Korean delegation in the discussion. However, the meeting dates are yet to be finalised.
Of the seven projects, the Bangladesh Bridge Authority (BBA) has the highest three projects involving an estimated cost of $11.05 billion. The Roads and Highways Department, the Bangladesh Railway, the Power Grid Company of Bangladesh, and the Dhaka Electric Supply Company Limited have one project each.
PPP Authority officials said the proposed projects would help improve the country's infrastructure while experts believe investment under the PPP would help reduce pressure on Bangladesh's internal resources.
Dr Shamsul Alam, member of the General Economics Division (GED) at the Planning Commission, told TBS that Bangladesh is facing a resource gap equivalent to $928.48 billion to achieve the Sustainable Development Goals (SDGs) by 2030.
He suggested collecting about $51.90 billion or 5.59% of the resource gap through the PPP mechanism.
Sultana Afroz, chief executive officer of the PPP Authority, said they signed the agreement with the KIND in 2019 to engage Korean private entrepreneurs in investments here on a government-to-government (G2G) basis.
She said three meetings of the joint PPP platform between the two countries were held so far.
However, progress of those projects has remained stalled due to the ongoing pandemic. "I hope we will find a way out so that the projects can navigate through the pandemic fallout," said Sultana Afroz.
Subway, expressway and circular Dhaka rail
Bangladesh wants to build its 28.7km long maiden subway connecting Tongi in Gazipur and Jhilmil in Keraniganj with the Korean joint venture.
Besides, the public-private partnership funding will cover the Dhaka Circular Railway, Dhaka East West elevated expressway, a bridge over the Meghna River connecting Aaraihazar and Bancharampur, and turning the Dhaka-Joydevpur-Mymensingh road into an expressway.
At the third meeting held in November last year, the Bangladesh Bridge Authority proposed that Korea invest $5.27 billion to construct the country's first subway from Tongi to Sadarghat. But the government of Korea proposed building the line up to Jhilmil of Keraniganj with an investment of $8 billion.
Belayet Hossain, secretary of the Bridges Division, told TBS that the Tongi-Jhilmil subway would be the first of 11 subways stretching 258km designed to be constructed within the next 30 years.
Bangladesh is keen to build a 39km elevated expressway to link the Dhaka-Aricha, the Dhaka-Chattogram and the Dhaka-Mawa highways.
The $2.05 billion project would help connect the southern and western districts with Chattogram and Sylhet – bypassing the traffic in Dhaka.
An integral part of the project will allow traffic to travel across the Padma River and south to Chattogram as well as northward to Joydebpur and Tangail on the outskirts of Dhaka and onwards to the northern districts such as Mymensingh.
Earlier, Malaysia and China showed interests in financing the infrastructure, but the government picked the Korean proposal.
Last year, Korean companies secured priority rights to construct the 80.89km long Dhaka Circular Railway. The Korean delegate will sit with the Bangladesh Railway officials to accelerate $8.4 billion investment in the project.
New bridge over Meghna to boost trade with India
The government wants to construct another bridge over the Meghna at Bhulta-Aaraihazar points to connect Agartola of India to Dhaka with the shortest distance. The bridge will serve as an alternate route to the Dhaka-Chattogram and the Dhaka-Sylhet highways.
The 1.68km four-lane bridge with 22km approach road will cost Tk7,463.75 crore, according to a pre-feasibility study by the Bridges Division. The government seeks about $1 billion from Korea to implement the project.
Underground power network in Purbachal
The government is going to establish a modern underground electricity distribution system in Purbachal new town area. The Dhaka Electric Supply Company Limited has conducted a feasibility study and estimated the cost at around $700 million.
Zulfiquar Tahmid, chief engineer (Development) of the Dhaka Electric Supply Company Limited, said a Korean company offered investment in the project.
"The project cost is huge and it is not viable financially. Considering it, we have sent a preliminary DPP [development project proposal] to the Power Division," he added.