Railway-based cargo carriage in Bangladesh is increasing, and officials are hopeful that trend will accelerate in the period ahead as a result of a regional Bangladesh, Bhutan, India, and Nepal connectivity initiative. Photo credit: Shutterstock.

The Asian Development Bank (ADB) Wednesday approved a $360 million loan to enable the Bangladesh Railway to buy modern rolling stock to increase its domestic and regional freight cargo transportation capacity.

Railway-based cargo carriage in Bangladesh is increasing annually, and officials are hopeful that trend will accelerate in the period ahead as a result of a regional Bangladesh, Bhutan, India, and Nepal connectivity initiative.

Railway transport is substantially cheaper and quicker for shippers. To reach Chittagong from Dhaka, a truck may require 10 to 16 hours' travel time, while a freight train takes 10.5 to 12 hours. Truck transport costs $200 to $300 by container, while a train charges $150 to $260.

In fiscal year 2016 to 2017 about 4.0 million tonnes (4.4 million tons) of goods were transported by Bangladesh railway cars for domestic destinations. To and from Dhaka and Chittagong the Bangladesh Railway transported nearly 75,000 TEU.

With the ADB loan, the Bangladesh Railway will buy 1,000 rail cars, 125 luggage vans, and 40 new locomotives for freight trains to increase freight train cargo capacity. Currently, Bangladesh Railway has only 450 rail cars to carry goods, officials said. 

“Railways in Bangladesh potentially offer a cheaper, safer, and more fuel-efficient means of transport of goods and passengers than roads, but have been held back by lack of investment and aging and unreliable rolling stock,” ADB senior transport specialist Tsuneyuki Sakai said.

In a statement, ADB said historically railways enjoyed a monopoly as a carrier and transported most commodities in Bangladesh.

However, its market share has dropped because of inadequate investment in railway infrastructure and rolling stock over an extended period, which has resulted in unreliable freight operations and uncomfortable experiences for passengers.

Bangladesh — old, inadequate rail equipment

Most Bangladesh Railway rolling stock is now more than 30 years old, and much is past the end of its economic/service lifetime. Maintenance facilities have also not improved over time and are not adequately equipped.

Bangladesh — in its seventh five-year plan, which covers the 2016 to 2020 period — targets increasing freight market share to 15 percent and passenger market share to 10 percent by 2020.

Another Bangladesh Railway director general told JOC.com that, globally, a significant volume of cargo is transported via containers, but Bangladesh legs behind in this case.

“The Inland Container Depot [ICD] in Dhaka is situated at the heart of the capital where truck movement remains suspended during the day time. Trucks can carry goods to and from the ICD only during night time. As a result, shippers feel discouraged to use rail route to carry containers,” he said.

He said three new ICDs are planned as part of a public-private partnership, which will help increase containerized goods movement in the country.

Two ICDs will be built in the Tongi industrial area and Pubail area in the Gazipur District, where a large number of apparel factories are located. Another ICD is planned in the Chittagong area. Apparel is the main export product for Bangladesh and its primary foreign currency earner.