China wins US$3 billion bid to build rail line in Bangladesh

China Railway Group, one of the world’s largest construction companies, said it has won a US$3.1 billion project to build a rail network in Bangladesh, according to company’s filing with the Hong Kong Stock Exchange on Tuesday.

The rail link will connect capital Dhaka to Jessore in southwestern Bangladesh, a distance of 168.6 kilometres, with the train designed to run at a top speed of 120 km/h, China Railway said. Construction will take 54 months to complete, the company said.

Chinese companies, backed by the government’s diplomatic and economic clout, have been snapping up infrastructure projects across Asia under the “One Belt, One Road” initiative.

“The project will promote trade links between Bangladesh and China, India as well as Myanmar,” state-run Xinhua News agency said in a report yesterday, after China Railway signed the construction contract with the Bangladeshi government.

The Dhaka-Jessore rail link isn’t China’s sole project in Bangladesh. In 2014, the Bangladeshi government awarded state-owned China Major Bridge Engineering Company Limited a US$1.55 billion contract to build its Padma Bridge project, which is to be completed in four years.

The contract size represents 3.3 per cent of China Railway Group’s latest audited operating revenue, the company said.

Beijing launched its “One Belt, One Road” strategy in 2013 to promote China’s economic and political presence overseas. The initiative involves building major energy and communications projects in central, west and southern Asia, as well as Africa and Europe.

Shares of China Railway rose 3.8 per cent to HK$6.31 on Tuesday trading in Hong Kong. The stock has risen 7.1 per cent this year.