Chinese consortium signs PPP contract to upgrade Dhaka Bypass

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The Government of Bangladesh has signed a concession contract with a consortium of the following companies: Sichuan Road and Bridge Group, Shamim Enterprise Ltd., and UDC Construction Limited to upgrade the Dhaka Bypass under a public-private partnership (PPP) arrangement. The project will deliver the first access-controlled expressway in the country.

Under the contract signed with the Ministry of Roads and Bridges, a four-lane tollway and a two-lane service road will be added to the Joydevpur–Debogram–Bhulta–Madanpur Road (N-105) section of the expressway. The 48-kilometer (km) project will provide a major arterial connection between the industrial zone northeast of Dhaka and national highway N1 connecting to the port city of Chattogram, as well as to N2, N3, and N4 highways leading to other major cities.

The consortium will design, build, finance, operate, and maintain the tolled expressway over a 25-year concession period, and will be able to charge tolls based on vehicle type. The Government of Bangladesh will offer viability gap funding of BDT3.1 billion (US$36.7 million) and a minimum revenue guarantee to the consortium to optimize the cost of financing. The contract also provides the government with a share of revenues generated by the consortium over a certain threshold.

The Asian Development Bank (ADB) acted as financial advisor on the transaction to the Public–Private Partnership Authority (PPPA) of Bangladesh. ADB’s Office of Public–Private Partnerships (OPPP) also provided legal support for this transaction and helped to develop a concession contract template for road PPPs through the Asia Pacific Project Preparation Facility (AP3F), a multi-donor trust fund managed by ADB. This project marks the first successful collaboration between ADB’s transaction advisory services and AP3F.

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