Bangladesh's logistics infrastructure could receive a much-needed boost thanks to US$360m in funding from The World Bank to overhaul the country's rivers, ports and canals.

The investment aims to improve the navigability and year-round safe transport for cargo and passengers along Bangladesh's busiest waterways as part of the Bangladesh Regional Waterway Transport Project 1. It also aims to make it a more sustainable and environmentally-friendly way of transporting goods, and could even expand intra-regional trade with India, Bhutan and Nepal.

The initiative will improve the navigability of 900km of inland waterways along the Chittagong-Dhaka-Ashuganj corridor and connecting routes, which will help reduce travel time and cost for cargo and passenger transport and boost national and regional trade, The World Bank says. Investment will also be put into building a new general cargo terminal at Pangaon and improve the existing cargo terminal at Ashuganj. 

For the garment and textile industry, in particular, the investment could help businesses meet and speed up lead times, as well as improve profits. 

"The roads are narrow and very busy and not up to the mark," explains one clothing manufacturer. "The construction is not that good. If I miss the shipment, if I cannot make it, the order gets cancelled or I shall have to bear it on my cost."

Qimiao Fan, World Bank country director for Bangladesh, Bhutan and Nepal, says the investment will help Bangladesh expand intra-regional trade with India, Bhutan and Nepal by improving connectivity through road, rail and inland waterways.

"As a riverine country, Bangladesh has a large inland water transport sector, which, if strengthened, can support the needs of its growing export-oriented economy. This project will modernise and improve the multi-modal transport and logistics system in the country and with its neighbours."

The project is part of a Regional Connectivity and Integration Program supported by The World Bank for the Bangladesh-Bhutan-India-Nepal (BBIN) countries. The project will also help build the capacity of the Bangladesh Inland Water Transport Authority to ensure modern and efficient management that matches international standards. It will also aim to achieve long-term operational and financial sustainability.

"High transport costs, low efficiency and delays in the logistics chain increases trade costs and reduces the competitiveness of Bangladesh's products," said Diep Nguyen-van Houtte, World Bank team leader for the project. "By improving riverine connectivity, the project will make movement easier for traders, producers, passengers and cargo on multi-modal transport networks in the sub-region, and help the poorest who rely on inland waterways as a mode of transport."

The credit from the World Bank's International Development Association has a 38-year term, including a six-year grace period, and a service charge of 0.75%. 

Source: World Bank