DHAKA, BANGLADESH (3 January 2019) — A consortium of companies from the People’s Republic of China—Sichuan Road and Bridge Group, Shamim Enterprise Ltd., and UDC Construction Limited—have signed a concession contract with the Government of Bangladesh to upgrade the Dhaka Bypass under a public-private partnership (PPP) arrangement. The Asian Development Bank (ADB) acted as financial advisor on the transaction to the Public–Private Partnership Authority (PPPA) of Bangladesh.
ADB’s OPPP also provided legal support for this transaction and helped to 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 project marks the first successful collaboration between ADB’s transaction advisory services and AP3F.
Under 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 48-kilometer (km) project will provide a major arterial connection between the industrial zone northeast of Dhaka and national highway N1 connecting to the port city of Chattogram, as well as to N2, N3, and N4 highways leading to other major cities.
The consortium will design, build, finance, operate, and maintain the tolled expressway over a 25-year concession period, and will be able to charge tolls based on vehicle type. The Government of Bangladesh will offer viability gap funding of 3.1 billion
ADB has been working with the Government of Bangladesh for over 5 years to transform the country’s roads by making them a bankable asset class attractive to international investors, as has happened in other sectors such as the independent power producer sector. ADB’s OPPP is also the transaction advisor to PPPA on the 13.5-km Rampura–Amulia–Demra Expressway in Dhaka and in December 2018 was appointed transaction advisor for the approximately 210-km Dhaka Chattogram Expressway, the busiest road artery for passenger and freight in the country.
ADB has long supported PPPs and in 2014 established the OPPP to provide independent transactional advice and develop broader PPP knowledge and expertise in the region. ADB has also pioneered the AP3F, a $73 million trust fund supported by the governments of Japan, Canada, and Australia, to provide project preparation, project definition, and capacity-building support to governments for PPP projects.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region.