Economy
Metro Rail Era starts as year Ends
Prime Minister Sheikh Hasina opened the first phase of the country’s first-ever metro rail service in the morning today (28 December).
President M Abdul Hamid and Prime Minister Sheikh Hasina on Tuesday greeted all who were involved in the implementation of the country’s first-ever elevated metro rail.
DMTCL has already completed its preparation to hold the colorful opening function at Diabari, Uttara at 11am and police-RAB personnel have taken all measures to ensure security of the event.
After the opening, the metro rail will run straight from Uttara to Agargaon without stopping at any intermediate station along the route. Commuters will be able to take a trip on the train from Thursday.
A train will wait for passengers at each platform for 10 minutes for the first few days as city dwellers are not familiar with this new transport system.
Initially, some 10 sets of trains having six coaches will run from Uttara to Agargaon. For the time being, the train will run on this route slowly. It will run from 8am to 12pm, the time will be extended later and the number of trains will be increased as per demand.
Talking to BSS Managing Director of Dhaka Mass Transit Company Limited (DMTCL) M.A.N Siddique said metro rail will be a first-time experience for people in Bangladesh so passengers would have to acquire experiences about the ticketing system and using the service.
“We will increase the number of trips, trains and stoppages at intermediate stations when people become familiar with the metro rail,” he said.
Dhaka is the second-largest city in South Asia and the seventh-largest in the world in terms of population. And the capital city is going to get the most modern transportation system with metro rail for commuters, Siddique said.
He said the metro rail will reduce public sufferings, since it will transport more passengers within a less time with comfortable means.
Common people believe that the inauguration of the metro rail will not only reduce traffic congestion in the city but also increase the overall revenue collection of the government.
However, if the train starts at full speed, one train will run every three-and-a-half minutes’ interval. How long the train will stay at one station has not been decided yet.
At each station, the train will wait till the boarding and alighting of passengers are completed. Each train can run at a speed of 100 to 110 km per hour with 2,300 passengers. However, the speed will be lower in areas with bends.
Abdul Kuddus, a commuter of Dhaka city, said three political parties have ruled the country for several periods after independence. None of the parties made much progress at the district or divisional level. As a result, the country’s major industries have developed in the capital. Every year, thousands of common people rush to Dhaka from villages for livelihood.
The Government of Bangladesh has formulated the following Time-bound Action Plan in order to establish a state-of-the-art strong Network of public transport system to be implemented by DMTCL consisting of Metro Rail routes covering the distance of 128.741 kilometres having 104 Stations in Dhaka city and its adjoining areas.
On March 29, 2022 Japan and Bangladesh signed “Exchange of Notes” and “Loan Agreement” for the 5th tranche of loans worth 18,285 million Japanese Yen for financing the Dhaka Mass Rapid Transit Development Project.
The metro rail is projected to carry 60,000 passengers per hour by traveling the entire route of 21.26 km from Uttara to Motijheel-Kamalapur Railway Station in less than 40 minutes.
Earlier on August 1, 2017, the implementation agency started installing the viaduct for the rail project. Within April this year they were scheduled to clean the occupied roads under the project areas, M.A.N Siddique said.
The 20.1-kilometer-long metro rail line lies through Uttara Phase-3 and the Bangladesh Bank in Motijheel via Pallabi, Rokeya Sarani, Khamarbari, Farmgate, Karwan Bazar, Shahbagh, Dhaka University’s Teacher-Student Centre, Doyel Chatwar and Jatiya Press Club.
Prime Minister Sheikh Hasina launched the construction work of the metro rail project, also known as the MRT Line-6, on June 24, 2016.
Later, Road Transport and Bridges Minister Obaidul Quader inaugurated the construction work of the first part of the elevated viaducts and nine stations of the MRT Line-6 at Agargaon point in the city on August 2, 2017.
The JICA (Japan International Cooperation Agency) provided around Tk 16,600 crore as project assistance out of the total cost of Tk 22,000 crore.
“I convey my sincere greetings to all those involved in the implementation of the (metro rail) project, including the Road Transport and Highways Division (RTHD),” said President Hamid in his statement.
“Another success of the people-friendly government has been achieved with the inauguration of the metro rail,” he said.
The head of the state said the ‘grand opening’ of the country’s first metro rail Mass Rapid Transit (MRT) line-6 from Uttara to Agargaon is a unique milestone in the development of the country’s communication system.
Lauding the present government for introducing such rail, the president added that it is a timely initiative of the government to introduce a fast, safe, reliable, air-conditioned, time-saving, electric, environment-friendly and remotely controlled state-of-the-art public transport system to alleviate the traffic congestion in the densely-populated metropolis of Dhaka and its surrounding districts.
“The journey of Metrorail will add a different dimension and pace to the transport system of Dhaka metropolis alongside saving the working hours of city dwellers,” he said.
Under her visionary and efficient leadership, the country is moving forward in the implementation of ‘Vision 2041’, he said.
As a result of the prudence, right direction and courageous leadership of the incumbent government, the smooth construction of metro rail has become possible in the densely populated Dhaka metropolis, he mentioned.
He appreciated the combined efforts of the government, Dhaka city dwellers and stakeholders because, without these efforts, the timely inauguration of MRT line-6 or the Uttara (North) to Agargaon section of Bangladesh’s first metro rail would not have been possible.
The metro rail is going to open (for all) before its scheduled time by overcoming many hurdles including the Covid-19 pandemic and the global economic recession, he added.
He hoped that with the launch of metro rail, there will be positive changes in the communication and socio-economic system of Dhaka metropolis and the country.
“It will be beneficial in business, especially in investment,” Hamid continued.
The auspicious inauguration of Uttara to Agargaon section of Metrorail in the month of victory is a unique gift of Prime Minister Sheikh Hasina to the nation, he mentioned.
“I am expecting the implementation of the entire section of Uttara to Kamlapur of the first metro rail of Bangladesh within the stipulated time,” he said.
In her message, PM Hasina said ‘Metrorail’, a symbol of Bangladesh’s pride and aspiration, is a unique milestone in Bangladesh’s city mass transport system.
The inauguration of Mass Rapid Transit (MRT) Line-6 or Bangladesh’s first metro rail is a long-awaited dream of the people of Dhaka city, the premier said.
“The dream of the city-dwellers is fulfilled today with the auspicious inauguration of MRT Line-6 from Uttara to Agargaon part,” she added.
She extended her sincere greetings to the people of the country on this auspicious occasion of the inauguration of the metro rail.
Keeping the slogan “Sobar Jonno Metrorail” in mind, she said Dhaka Metrorail has included all the necessary facilities for people with special needs like the developed world.
To ensure the safe and comfortable travel of women passengers in metro rail, every metro train has a dedicated women’s coach, she added.
PM Hasina wished for continued prosperity of the metro rail in the days to come.
The Bangladesh Bank has adjusted the dollar price to Tk117 from Tk110 by introducing the crawling peg exchange rate mechanism.
Under this new approach, the bank will buy and sell dollars with Tk117 as the mid rate.
This decision was reached during a meeting of the monetary policy committee on Wednesday, May 8th.
Additionally, the committee has opted to discontinue the SMART lending rate mechanism, allowing banks to set their lending rates based on dollar demand and supply, according to a circular issued after the meeting.
The crawling peg system permits a currency with a fixed exchange rate to fluctuate within a specified band of rates, combining features of both fixed and floating exchange rate regimes.
On May 5th, Bangladesh Bank Governor Abdur Rouf Talukder announced the adoption of a market-based interest rate and the implementation of a crawling peg system to stabilize the foreign exchange rate.
He stated that the central bank is collaborating with prominent economists and bankers to devise a contractionary monetary policy aimed at curbing inflation and restoring macroeconomic stability.
Earlier, on April 2nd, the World Bank stressed the importance of a crawling peg mechanism aligned with market-clearing exchange rates to narrow the gap between formal and informal exchange rates, as outlined in the latest Bangladesh Development Update report.
Meanwhile, the International Monetary Fund (IMF) has advocated for a market-based dollar rate. In January 2023, the IMF attached several conditions to a $4.7 billion loan facility over a three-and-a-half-year period. Bangladesh has received two installments of the loan by fulfilling nearly all conditions, except for the reserve requirement.
The International Monetary Fund has finally given Bangladesh the green signal for $681 million as the third instalment of the lender’s $4.7 billion loan package.
The visiting delegation of the lender has confirmed that the instalment will be released in June, several top finance ministry officials told the news reporter following a meeting with the IMF team yesterday.
They said various aspects of an agreement for securing the third instalment were finalised in a series of meetings with the IMF and different wings of the finance ministry yesterday.
The lender is likely to reduce the requirement for June’s net foreign exchange reserve from $20.10 billion to $17-$18 billion, they added.
The IMF had a condition for Bangladesh to have reserves of $19.26 billion by March-end and $20.10 billion by June’s end for the third instalment.
An official from the finance division told the news reporter that despite current reserves now around $15 billion, receiving the third instalment is assured even if this condition is not met.
Bangladesh and the IMF do not have much disagreement on most issues, said the official, adding that the government is working to implement the conditions imposed by the IMF including reducing subsidies, increasing revenue and reserves.
He said a new reserves requirement will be finalised in a meeting with the central bank on Tuesday. The IMF will also determine the net reserve target for October and December for the fourth instalment.
Bangladesh also failed to meet the net reserve requirement and revenue target before receiving the second instalment. Back then, the IMF signed the MoU by reducing the targets for next March and June.
Another official said the government also has doubts about achieving the lender’s condition for revenue target for June.
“Therefore, the finance ministry has also sought concessions from the IMF’s targets for June revenue collection. In the new MoU, the IMF is also likely to make concessions in this regard,” said the official.
The government has collected Tk1,62,164 crore against the revised target of Tk1,43,640 crore till last December, according to the finance ministry. However, revenue of Tk3,94,530 crore has to be collected at the end of the financial year.
Assessing revenue collection growth over the current fiscal year’s nine months, the revenue board predicts falling short of the target by at least Tk10,000 crore by June’s end.
Govt actively following IMF’s directives
Ahsan H Mansur, executive director of the Policy Research Institute, told the news reporter that the IMF’s current focus includes transitioning to a market-based exchange rate, leaving interest rates to the market, enhancing revenue collection, and reducing government subsidies.
He said the government is actively aligning policies with the IMF’s directives.
“The IMF may reduce the June net reserve requirement from $20.10 billion to $17-$18 billion. But it will be difficult to achieve before June,” said the economist.
Ramifications of not meeting conditions
Mahbub Ahmed, former senior secretary of the Finance Division, told the new reporter that the government is working to meet IMF conditions to secure the third loan instalment.
He said, “Despite not meeting conditions on foreign exchange reserves or revenue, we remain optimistic about receiving the third tranche.”
He said failing to meet the conditions satisfactorily may hinder receiving the two instalments scheduled for the next fiscal year.
“As the government has until the next fiscal year to fulfil the conditions, the IMF may get strict for the next instalments,” said the former secretary.
He further mentioned that Bangladesh has never received the last instalment of the IMF loan except once due to not being able to fulfil the conditions.
“In 2016, when I was finance secretary, I received the last instalment of the IMF’s $1 billion loan. Before this, Bangladesh could never take the final instalment of the loan,” he added.
Meeting with BB today
The IMF officials will meet with central bank officials on Tuesday morning to adjust banking sector conditions for securing the third and fourth loan instalments.
Later in the day, they will finalise the MoU with State Minister for Finance Waseqa Ayesha Khan and Finance Division Secretary Khairuzzaman Mozumder, attaching the revised terms for releasing the instalments.
The delegation, led by Chris Papageorgiou, head of IMF’s Development Macroeconomics Division, will leave Dhaka after a press briefing on 8 May. The team arrived on 24 April to review the loan programme.
In January last year, Bangladesh signed a $4.7 billion loan agreement with the IMF due to dwindling foreign exchange reserves. The loan is being distributed in seven instalments by 2026. The lender cleared $447.8 million of the first instalment in February last year, and $681 million of the second instalment in December
Bangladesh and Egypt have affirmed their commitment to enhancing bilateral cooperation through regular foreign office consultations.
During a meeting between Foreign Minister Hasan Mahmud and Egyptian Foreign Minister Sameh Hassan Shoukry on Saturday afternoon, held on the sidelines of the 15th Organisation of Islamic Cooperation (OIC) Summit in Gambia, discussions were held on various matters of mutual interest. These included boosting trade and investment between the two nations and addressing the Rohingya crisis.
Foreign Minister Hasan Mahmud proposed mutual visa exemption and expanding trade with Egypt during the meeting. The Egyptian foreign minister agreed in principle to sign an agreement on diplomatic and official visa exemption.
Additionally, the Egyptian foreign minister pledged full support for the construction of the Chancery building of the Bangladesh mission in Egypt.
Following this, Deemah Al Yahya, Secretary General of the Digital Cooperation Organization (DCO), paid a courtesy call to Foreign Minister Dr Hasan Mahmud.
During the meeting, Al Yahya informed the Foreign Minister about the drafting of an agreement titled ‘Multilateral AI Agreement’ on the International Use of Artificial Intelligence by the member states of DCO.
Expressing sincere interest, Al Yahya accepted the invitation from the Foreign Minister to visit Bangladesh and witness the country’s progress in the field of information and communication technology. He expressed hope for expanding DCO’s cooperation with Bangladesh in this sector through the visit.
