Japan to provide $1.4 billion funding for subway in Dhaka

The Japanese government is providing a loan of Tk 11,400 crore ($ 1.4 billion) to its Bangladesh counterpart for construction of a subway in the capital Dhaka. 

The two sides signed the loan agreement on Tuesday. Fatima Yasmin, Secretary, Economic Relations Division (ERD), and ITO Naoki, the Ambassador of Japan signed the agreement on behalf of their respective sides. 

The total cost of the Metrorail Line-5 project is Tk 41,238 crore. Under the project, 13.50 km underground metro rail and 6.50 km fly metro rail will be constructed. The new metro rail, 14 km, will be the subway of the 20 km long line from Gabtali to Bhatara.

The remaining 6km will be elevated. As a result, there will be a Metrorail with a combination of subway and fly systems on the same route . The proposed MRT Route-5 (Northern Route) will have 14 stations. Nine of these stations will be underground. The remaining five stations will be overground.

The objective of the project is to alleviate traffic congestion and mitigate air pollution in Dhaka city by constructing 20 km mass rapid transit system, MRT line-5 from Hemayetpur-Aminbazar Gabtoli-Mirpur I-Mirpul-10 Kochukhet-Cantonment-Banani-Gubhan2-Nutun Bazar and Bhatara.

The rate of interest of this loan will be 0.7 percent for construction 0.0114 percent for consultancy services, front end fee (at a time) 0.294 per cent and repayment period will be 30 years which includes 10-year grace period, report UNB.