Chinese consortium signs PPP contract for Dhaka Bypass

WCN Editorial Team 4 Jan 2019 ASIA TRANSPORT INFRASTRUCTURE

A Chinese consortium comprising Sichuan Road and Bridge Group, Shamim Enterprise and UDC Construction has signed a public-private partnership (PPP) concession contract with the Government of Bangladesh to upgrade the Dhaka Bypass.

The Asian Development Bank (ADB) acted as financial advisor to the Public-Private Partnership Authority (PPPA) of Bangladesh.

PPPA CEO Syed Afsor Uddin said: “This project brings a new dimension to public service delivery in Bangladesh. It is the first access-controlled expressway in the country.

“This landmark transaction will pave the way for a pipeline of national expressways across Bangladesh.”

ADB’s Office of Public-Private Partnership (OPPP) has provided legal support for the transaction and helped develop a concession contract template for road PPPs through the Asia Pacific Project Preparation Facility (AP3F), a multi-donor trust fund managed by ADB.

This is the first successful collaboration between ADB’s transaction advisory services and AP3F.

OPPP head Yoji Morishita said: “ADB aims to accelerate road development in Bangladesh while minimizing the financing and operational burden and bringing in a diverse set of internationally renowned infrastructure developers, operators, and financial institutions.

“The Government of Bangladesh establishes the objectives of the infrastructure as well as some credit supports to tackle the traffic challenge, while the private sector takes responsibility for meeting the objectives.

“The Dhaka Bypass is the first step in our strategy to bring Bangladesh roads to the global market based on the PPP model.”

Under the terms of the contract signed with the Ministry of Roads and Bridges, a four-lane tollway and a two-lane service road will be added to the Joydevpur-Debogram-Bhulta-Madanpur Road (N-105) section of the expressway.

The 48km project will provide an arterial connection between the industrial zone northeast of Dhaka and national highway N1 connecting to the port city of Chattogram, and to N2, N3 and N4 highways leading to other major cities.

The consortium, which will design, build, finance, operate and maintain the tolled expressway over a 25-year concession period, will also charge tolls based on vehicle type.

The Bangladesh government will offer viability gap funding of BDT3.1bn ($37m) and a minimum revenue guarantee to the consortium to optimise the cost of financing.

Under the contract, the government will also receive a share of revenues generated by the consortium over a certain threshold.

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Image: Chinese consortium signs PPP contract for Dhaka Bypass. Photo: Courtesy of Justin Lawrence on Unsplash.

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