The government is going to procure 200 meter-gauge railway coaches from China, at a cost of Tk927 crore, to provide modern, safe and comfortable service to passenger.
The Shangai Pudong Development Bank of China will provide Tk713 crore as loan out of the total Tk927 crore cost of the purchase.
The decision was taken on Monday at a meeting of the standing committee on non- concessional loans, with Finance Minister AHM Mustafa Kamal in the chair.
The minister briefed reporters at his office at Sher-e-Bangla Nagar in Dhaka after the meeting.
He said it is an old project that was undertaken in 2011, and procurement of the coaches was delayed because of the unavailability of loans.
This time, the Shangai Pudong Development Bank of China offered the loan, he said, and added that a Chinese company will supply the coaches.
The interest rate will be the Euribor (the Euro Interbank Offered Rate) plus two percent.
As the Euribor interest rate is negative, the interest rate will be two percent, he said.
Sources at Bangladesh Railway said the project proposal to procure coaches was approved in a meeting of the Executive Committee of the National Economic Council in August 2016.
The government inked a deal with a Chinese construction company named CRRC Sifang on August 11 last year for this project.
Though delayed, Bangladesh Railway has finally completed the procedure of procuring the coaches, said the minister.
The minister added that the prime minister has agreed in principle to take the loan, and that the Cabinet Purchase Committee has also approved the decision.
Bangladesh has not used such coaches before. Therefore, a committee will be formed to check which countries are using the coaches, and ask them about their quality, he said.
The final decision to buy the coaches will be taken if the evaluation report says they are good, said the minister.
The minister added that under the present circumstances, the project, which was earlier scheduled to be finished by 2020, might not be completed within this timeframe.