B Mirror Report: The Asian Infrastructure Investment Bank (AIIB) has agreed to extend a loan of $164.57 million to procure 30 metre-gauge diesel-electric locomotives for Bangladesh Railway under the Railway Capacity Expansion (RACE) project, officials at the Economic Relations Division (ERD) said.

The Ministry of Railways has already submitted a Preliminary Development Project Proposal (PDPP) to the Planning Commission, with the total project cost estimated at over Tk 22.45 billion.

Of the total cost, around Tk 15.45 billion, or nearly 69 percent, will be financed through the AIIB loan, while the remaining Tk 7.0 billion will come from the government’s own resources, according to the proposal.

Officials said the initiative is designed to address ongoing operational constraints caused by a mismatch between rapid railway infrastructure expansion in recent years and an insufficient number of locomotives.

According to a project summary prepared by AIIB, the government plans to procure a total of 60 new metre-gauge locomotives to tackle the shortage. Of these, 30 will be financed by AIIB, while the remaining 30 will be procured under the Chattogram–Dohazari railway project with support from the Asian Development Bank (ADB).

The overall cost of the RACE project is estimated at $241.47 million, with the government contributing approximately $76.9 million.

Sector insiders noted that the shortage of locomotives has limited the full utilisation of newly constructed and upgraded railway lines, leaving both passenger and freight demand partially unmet.

The proposed procurement is expected to enable the introduction of additional services on high-demand intercity and freight routes, thereby enhancing revenue generation and improving overall network efficiency.

The project will also help align operational capacity with recent infrastructure investments, allowing the railway to maximise returns from large-scale developments.

Under the project framework, one component will focus on the procurement of locomotives along with spare parts and commissioning support, while another will emphasise project management and capacity building, including training programmes and study tours.

Replacement of ageing locomotives with modern, fuel-efficient units is also expected to improve energy efficiency and reduce greenhouse gas emissions, contributing to the country’s climate goals.

Analysts observed that the initiative highlights the importance of synchronising infrastructure development with rolling stock procurement, warning that without such coordination, the full economic benefits of railway investments may not be realised.