India has handed over ten broad-gauge diesel-engined locomotives to Bangladesh in support of 17 railway sector projects that are part of a letter of credit (L/C) based assistance scheme extended by India to Bangladesh.

The 3,300 horsepower locomotives with a maximum speed of 120 kilometres per hour are valued at around US$9 million and have a residual life of at least 28 years.

L/C railway commitments

India has committed US$2.44 billion of L/Cs to Bangladesh for its railways at an interest rate of one per cent a year. Bangladesh has 20 years to repay the L/Cs with a moratorium for five years.

Of the 17 railway sector projects, nine have been successfully completed, including the supply of broad- and metre-gauge locomotives, flat wagons, railway bridges and signalling equipment.

L/C funded projects

Railway projects under implementation using low cost L/C funding include the US$78 million Kulaura-Shahbazpur railway line, due for completion this year.

Also benefitting from low cost L/C terms is the US$389 million Khulna-Mongla railway line, scheduled for completion by June 2021.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.