Bangladesh and the Asian Development Bank (ADB) today signed agreements for $505 million in loans to further improve the country’s railway services that will help the national economy and boost sub-regional trade.

Senior Secretary of the Economic Relations Division (ERD) Mohammad Mejbahuddin and ADB Country Director in Bangladesh Kazuhiko Higuchi inked the deals at the ERD Auditorium in Dhaka.

“The assistance will help railways better serve needs of people and movement of goods, and help improve domestic and sub-regional trade,” said Higuchi.

“This project will also help improve the overall railway transport system in Bangladesh, and aims to reduce transport costs and improve logistics of strategic corridors, such as Dhaka–Chittagong link, for sub-regional trade.” he added.

The South Asia Sub-regional Economic Cooperation (SASEC) Railway Connectivity: Akhaura–Laksam Double Track Project will help upgrade the 72-kilometer Akhaura–Laksam section of the Dhaka–Chittagong railway corridor to a double track dual-gauge railway line, along with modern signaling equipment, an ADB statement said.

It also said the existing track will be upgraded in accordance with the requirements of the Trans Asia Railways network. Eleven railway stations will be reconstructed with special facilities for the elderly, women, children, and disabled. The project will also support capacity development for the permanent project management unit to be established in Bangladesh Railway and for accessing climate mitigation funding.

ADB said, the Akhaura-Laksam section is part of a major sub-regional corridor and of the Trans-Asia Railway network. The project was endorsed by the SASEC Trade Facilitation and Transport Working Group in a meeting held in Singapore on 30 October, 2013.

The total project cost is $805 million. The European Investment Bank (EIB) will co-finance the project with $175 million while the government will provide $125 million. The project will be executed by Bangladesh Railway and is expected to be completed by 2022.