China has reportedly offered to set up a joint venture company with the Bangladesh government for building tracks and operate high-speed trains between Dhaka and Chittagong. The estimated cost of the proposed project would be USD11 billion with China and Bangladesh sharing it at 80:20 ratio. This project, if implemented, would not be on the Public-Private Partnership (PPP) model but BOO (Build-Own-Operate) system. Given the slow rate of implementation of most PPP projects, it is understandable why a different model has been proposed. It would be essential for the government to conduct an in-depth and exhaustive feasibility study to know the pros-and-cons of such a cost-intensive project. With a depleting foreign exchange reserve, the government has initiated a number of measures to shore up the same. Import restraint is one such initiative. But the fact remains that this type of project does deserve special scrutiny, even in normal situation.
Then of course there comes the issue of the conventional system of railway, i.e. Bangladesh Railway (BR), which has been beset by all sorts of technical and infrastructural problems spanning many decades. This mode of mass transportation needs billions of dollars in investment to upgrade the service as a whole. Its inefficient management under various governments begs the question whether this state-run facility needs to be divested or privatised first before the country embarks on something as ambitious as a high-speed train system. The project proposed would require Bangladesh to spend more than USD2 billion for a service that would connect only one route. Although this is merely a proposal at this stage, and, hopefully, nothing would transpire without a serious feasibility study, the question that must be asked is whether the country can presently afford to take up a project of this magnitude.
On paper it certainly looks very attractive. Earlier, the prime minister had directed BR to develop a project to introduce a high-speed train service between the two major urban centres, Dhaka and Chattogram and Dhaka and Payra Port. Although no decision has been made, one cannot stress enough the need to have a proper feasibility study to gauge the cost-benefit analysis for this proposed multi-billion-dollar project. This is more so because numerous mega projects have seen their timelines extended time and again with cost overrun.
At a time when the country has cancelled many infrastructure projects, it would perhaps be prudent to exercise extreme caution, which is why the point is being reiterated. The volatility of energy prices and Bangladesh's dependence on foreign sources for the import of fuels has already stretched the financial capacity to theextremes.At the end of the day, it is about national priorities and forex reserves should be expended only to procure the absolutely necessary essentials and nothing more.
