Korea Eximbank is interested to provide loans for the construction of the metro rail route from Dhaka's Kamalapur to Madanpur in Narayanganj.
The loan offer will now require approval from the government of South Korea, according to officials familiar with the development.
Bangladesh will soon send a formal proposal to the Korean government to finalise the loan for the around 16km route, officially known as the Mass Rapid Transit (MRT) Line-4, said officials at the Economic Relations Division (ERD) and the Road Transport and Highways Division.
According to sources at the Dhaka Mass Transit Company Limited (DMTCL), the MRT Line-4 will run via Kanchpur; its Kamalapur-Jatrabari portion is likely to be underground. In addition, a bridge has to be built over the River Meghna at Kanchpur, while the route will be elevated from Kanchpur to Madanpur.
Initially, the DMTCL estimates that the construction of the MRT Line-4 will cost Tk30,000crore. However, the details relating to costs will be finalised once a feasibility study is conducted, they added.
According to ERD officials, Korea Eximbank – the South Korean government agency for the Economic Development Co-operation Fund (EDCF) - has expressed interest in providing financial assistance to various development projects in Bangladesh, including the MRT Line-4 project.
The Bangladesh authorities have been asked to send preliminary development project proposals (PDPPs) of their various development projects and project preparation assistances (PPAs) as per format of the Korea Eximbank to the ERD. The projects include the MRT Line-4 one, the ERD officials added.
According to the Road Transport and Highways Division, the DMTCL is preparing the PDPP for the MRT Line-4 project. In a day or two, it will send it to the Road Transport and Highways Division.
The PDPP will be sent to the Planning Commission after scrutiny and with the consent of the Road Transport and Bridges ministry. With approval from the commission, the loan proposal will be sent to Korea through the ERD for Seoul's final decision, added officials at the Road Transport and Highways Division.
Compared to other development partners, the Korean government provides loans to Bangladesh on easier terms. Korea Eximbank's loan interest rate is 0.1-05% and service charge is 0.1% with a grace period of 15 years and a repayment period of 40 years.
"The construction of a 129.90-kilometre metro rail route by 2030 has been finalised, which includes Mass Rapid Transit Line-4, stretching from Dhaka's Kamalapur to Narayanganj," MAN Siddique, managing director of the Dhaka Mass Transit Company Limited, told The Business Standard.
He added that a letter has been sent from the ERD regarding the implementation of the MRT Line-4 with Korean funding. Measures are being taken in this regard as per directives of the Road Transport and Highways Division.
The government wants to expand metro rail services beyond the capital, including some towns and suburbs around Dhaka district. Services will be extended to other districts, such as Narayanganj and Gazipur.
The Dhaka Transport Coordination Authority (DTCA) and Dhaka Mass Transit Company Limited under the Road Transport and Bridges ministry are working to finalise plans to set up metro routes in these areas.
The DTCA has begun implementing a project to update the Revised Strategic Transport Plan (RSTP) with the assistance of the Asian Development Bank (ADB) and Japan Fund for Poverty Reduction (JFPR).
The government has set a target of completing the construction of six metro rail lines by 2030 as a means of increasing public transport in a bid to reduce traffic congestion and improve the environment in Dhaka city and its surrounding areas.
With the construction of these MRT lines, it is expected that there will be no more traffic jams in Dhaka.