The World Bank (WB) has pledged to provide a $745m loan for the implementation of the Bangladesh Bhutan India Nepal (BBIN) Regional Transport and Trade Facilitation Program (Phase 1), which aims to boost connectivity among the countries.
The pledge was officially notified by a letter the WB recently sent to the Economic Relations Division (ERD) of the finance ministry, officials confirmed.
"Procedures regarding the World Bank loan will be completed within the current fiscal year," said Abdul Baki, additional secretary (wing Chief) of ERD.
"There is a possibility that the loan will be approved during the World Bank's board meeting in May," he added.
Eyeing the implementation of the BBIN program, the Bangladesh government has already moved towards necessary policy reforms and modernisation of infrastructures including the development of regional roads, revenue stations, land ports and naval ports.
Earlier last year (from 14 November to 13 December), a WB delegation visited Bangladesh and during the trip, they inspected various land ports and had meetings with several agencies.
The BBIN agreement was signed on 15 June 2015 at Bhutan's capital Thimphu to facilitate cross-border movement of passengers and cargo vehicles. Later, on 27 November, Bangladesh, India and Nepal ratified the pact during a tripartite meeting in Delhi while Bhutan backtracked.
Four state agencies – Bangladesh Land Port Authority (BLPA), Roads and Highways Department, Ministry of Commerce and Bangladesh National Board of Revenue (NBR) will implement the programme, segmented into four components.
According to sources at the ERD, $250m of the proposed loan amount will be handed to BLPA for developing infrastructures and enhancing the capacity of the three largest land ports of the country – Benapole, Bhomra and Burimari.
According to the project description, infrastructure development of the ports will be premised on digitalisation which will be reinforced by more efficient and automated border processes and cargo handling.
For the modernisation of custom houses of Dhaka and Chattogram and the development of revenue stations, another $170m will be provided which will be spent through the NBR.
The Chattogram custom house, which handles 90% of the country's export-import declarations, will be upgraded in line with global standards and will adopt green and climate-resilient construction, said the officials.
Of the remaining pledged amount, $300m will go for policy development and technical assistance in the regional connectivity project of Sylhet-Charkhai-Sheola-Sutarkandi highway upgrading under the supervision of the Roads and Highways Department.
The highway connects the Sheila land port at Sutrakandi with the Sylhet-Dhaka Highway which is part of the Asian Highway. A section of this road is also part of another strategic corridor, the Bangladesh-China-India-Myanmar (BCIM) corridor which extends from Kolkata.
Financing this road section would complement the WB's investments in Benapole, Bhomra and Sheola land ports, the Asian Development Bank's investments on the Dhaka-Sylhet road and the Asian Infrastructure Investment Bank's investment in the Sylhet-Tamabil road.
The support for the road infrastructure will be accompanied by technical assistance to help Bangladesh prepare and subsequently implement the BBIN motor vehicle pact.
Another $16m of the WB fund will be spent for the trade facilitation agreement (TFA) implementation, which will go through the commerce ministry.
Bangladesh's implementation of the TFA will be supported through the strengthening of the national trade facilitation committee (NTFC), development of a national trade facilitation action plan and the development of a decision support system for policy analysis, trade statistics and trade negotiations.
It was further agreed that the project will extend support for the skills development of women traders.