32234-023: MFF - Railway Sector Investment Program (Subproject 1)

Project Data Sheet (PDS): Details


The Railway Sector Investment Program which is based on the Government's Sector Roadmap and Investment Plan for 2007-2013 will improve the performance of the railway sector by implementing (i) a reform project of sector policy, organizational, and capacity building reforms to make Bangladesh Railway (BR) more commercially focused, and improve governance and accountability; and (ii) an investment project of infrastructure and rolling stock capacity improvement investments to overcome capacity bottlenecks in sectors where such investments are both economically and financially viable, e.g., the Dhaka-Chittagong and Dhaka-Darsana-Khulna corridors where it can support major direct investment. The reform and the investment projects are integrated as approval of investment subprojects will be dependent on the implementation of specific sector reform actions.

Project Rationale and Linkage to Country/Regional Strategy

Efficient transport is essential to achieve higher levels of economic growth needed for sustainable poverty reduction in Bangladesh. BR has been losing market share and consequently making financial losses thus relying on Government budgetary support. This financial support has not been enough to allow for additional investment needed in critical corridors such as the Dhaka-Chittagong and Dhaka-Darsana-Khulna corridors to overcome capacity constraints leading to poor operational performance of the railways. This in turn causes it to lose market railways will ease the pressure on land since Bangladesh has a very high population density and land is scare. It will also ease the pressure on the road network, which is congested in key corridors and thus benefit transport as a whole. This will require capital investments and reforms to ensure that the investments lead to a sustainable improvement in BR's operational and financial performance.


Promote sustainable national economic growth and poverty reduction in Bangladesh. It will achieve this by improving rail transport efficiency and capacity.

Project Outcome

Description of Outcome

Improve the performance of the railways sector through enhanced efficiency

Progress Towards Outcome

L2316: Construction of the Tongi-Bhairab Bazar Double Track was awarded on 27 July 2011, and the project is now under implementation. L2317: Bid docs for the procurement of videoconferencing equipment and other software and hardware approved by ADB on 15 September 2014. The actions as agreed upon in the reform program for BR are under implementation. (1) Restructure BR by Lines of Business (LOB) - An outsourcing/divesture plan for non-core services has been developed and approved. Performance of LOBs being reviewed. (2) Improve financial governance system - New Acctg and Financial Mgt system implemented in Oct 2013 through ERP software based on the new accounting architecture. (3) Improve human resource governance system - Job description of the LOB Heads has already been approved on 22 Mar 2011. LOB Heads now working according to the job description. Additional modules of the ERP IT System are rolled out progressively and nationwide coverage of the system is under implementation. (4) Improve BR operation and maintenance practices and performance - TA Consultants submitted reports to improve maintenance practices for track and signaling system in Feb 2008, rolling stock in May 2008, and improving train operations efficiency in May 2008 and April 2010. The reports were sent to respective departments to implement at field level. New manuals on New Signalling, Way and Works and LWR, and Operations have been approved. Completion report sent to ADB in July 2013.

Implementation Progress

Description of Project Outputs

2316: Double track between Tongi and Bhairab Bazar completed 2317: BR becomes a commercially focused rail service provider 2317: BR corporate governance is improved 2317: BR safety record is improved

Status of Operation/Construction or Implementation Progress

L2316: The physical progress of the Tongi-Bhairab Bazar Double Track project is 88% as of 31 Dec 2014. Loan 2317: The software for enterprise resource planning and safety equipment have been procured, and requisite training was completed in 2014. Installation and commissioning of various computer, hardware and networking equipment were completed in December 2014. Procurement of videoconferencing equipment and recruitment of the consultants for Enterprise Resource Planning (ERP) software implementation are ongoing. Ministry of Railways (MoR) approved the "Recommendation on Tariff Structure of Bangladesh" report on 9 December 2014. Activities on implementation of Tariff Structure (Tariff Reform) are ongoing. MoR has given in-principle approval for the corporatization of container services on 16 April 2014. The proposal was brought up at the Cabinet Division but has been returned to MoR with the advice of getting comments from the Ministry of Public Administration and Finance. The proposal is being reviewed by both Ministries.

Safeguard Categories

Environment: B
Involuntary Resettlement: A
Indigenous Peoples: C

Summary of Environmental and Social Aspects

Environmental Aspect

Transport, especially vehicle emission, is the highest contributor to Bangladesh s air pollution problems. Improving the railway network will contribute significantly to reducing air pollution associated with vehicle emission especially in Chittagong, Dhaka and Khulna. The other expected potential environmental impacts are related to improving access, which will lead to increasing uncontrolled exploitation of natural resources. However, the gradual improvement in enforcing the Environmental Conservation Act, 1995 is expected to minimize the potential uncontrolled exploitation of natural resources and the environment. Nonetheless, implementation of the Investment Program has environmental consequences due to its physical intervention such as construction of railway networks. In this context, the Investment Project is categorized as a B project in accordance with ADB s Environment Policy, 2002. The initial environmental examination of the sample subproject systematically illustrates the potential environmental impacts, proposed mitigation measures, and how to implement the mitigation measures. The assessment of impacts at the subproject level will become an integral part of managing the Investment Project. The initial environmental examination for the Tongi Bhairab Bazar (64 km) section (as a sample subproject) shows that the environmental impacts associated with construction of additional tracks and formation of additional embankment, including bridge construction, are temporary and will occur only during construction. These impacts require mitigation measures that are manageable and mostly can be incorporated into construction works. 16 Therefore, the environmental management and monitoring plan, which clearly describes the required mitigation measures, will be incorporated in the bidding document to ensure that the contractors implement the mitigation measures properly. The plan provides overall guidance to address environmental impacts related to the sample subproject. For the follow-up subprojects, an environmental assessment review framework was prepared to guide the impacts assessment procedure.

Involuntary Resettlement

The Project will lead to loss of agricultural land and structures both commercial as well as residential, and loss of livelihoods in many cases. To mitigate this adverse impact on the affected population, a resettlement plan was prepared for the core subproject. To address the resettlement impacts of noncore subprojects, a resettlement framework was prepared. Subproject resettlement plans have been prepared during implementation.

Indigenous Peoples

No indigenous people will be adversely affected by the Project.


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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