Bangladesh: Railway Capacity Expansion (RACE) Project

proposed

To address the critical shortage of serviceable locomotives in Bangladesh, the Government is planning to procure 60 new meter gauge (MG) locomotives. This will enable Bangladesh Railway (BR) to capture suppressed demand, particularly on profitable intercity and freight routes, translating directly into increased revenue. It will also allow BR to fully leverage its recent infrastructure investments by introducing services in routes where demand is high but operational capacity is constrained. The replacement of obsolete locomotives with modern, fuel-efficient units would also result in lower carbon emissions, helping the country's climate mitigation efforts. The government has requested financial assistance from the AIIB for the procurement of 30 MG locomotives, whereas the remaining 30 will be procured through a proposed ADB-financed project (Bangladesh: South Asia Subregional Economic Cooperation: Chattogram-Dohazari Railway Project).  The RACE project is expected to comprise the following two components, with AIIB's financing likely to support most of them: (i)    Component 1 - Locomotive Procurement: This will include procurement of 30 MG Diesel Electric Locomotives with capital and maintenance spare parts as well as commissioning of the procured locomotives. (ii)   Component 2 - Project Management and Capacity Building activities (i.e., training, study tour) for the benefit of the BR.