Australian firm offers $16bn loan for high-speed rail projects

[Indos]

This high-speed railway will help decentralise Dhaka as there is less need for people to live in Dhaka in order to work and study there.

BD needs to think medium-long term, rather than short term if it is to become even a “middle-income” country and this project is a great one from BAL that shows strategic thinking.

Nope bro, it is wrong to say HSR will be used for people live outside Dhaka to work and study at Dhaka. It will be quite expensive for that. HSR tickets is much expensive than commuter line. Bangladesh just need commuter line like Greater Jakarta Commuter line.

Greater Jakarta commuter line is also used by people living outside Jakarta like Bogor, Serpong, and Bekasi which are cities inside West Java province to commute. The ticket is only around 1/4 USD and quite cheap. With that price our state owned railway can still make profit. While Jakarta-Bandung HSR tickets price will likely be around 8 USD.

 

[UKBengali]

Why can't we just let South Korea or Japan plan our cities ? Also our infrastructure is meh not bad but the mega projects are being built by foreigners and we really need to start making our own infrastructure and mega projects on our own.

This is why BD needs to grab this offer if the interest rate is good as BD can allow it's companies to participate and learn from the experts like the Japanese and the Koreans in high-speed railway.

 

[nang2]

The Australian investor will supply the fund through the bespoke portfolio – a process to raise money from the global money market

I don't understand this sentence. If the money is raised from global money market, isn't the investor a global investor? Why is it said to be "The Australian investor"?

 

[Indos]

HSR interior will be like a plane interior, it is not intended for people to commute

Jakarta-Bandung HSR

 

[Indos]

To commute, better build commuter line or LRT

Greater Jakarta LRT. This will connect cities near Jakarta into Jakarta

Progress

 

[Indos]

What I can say is that if Bangladesh take those 16 billion loan just to build HSR while people can still take plane to go to other cities then I suggest there is big bribery going on. Usually there should be reputable consultant firm to make cost benefit assessment before saying yes to the project.

Jakarta-Bandung can still go ahead because pretty much government doesnt need to pay the loan. It is BOT system but our state owned companies contribute 60 % of the stake. The reason the project is still go ahead is also to develop Walini region which land is entirely own by our state owned company. Walini will be the cities that will be part of the HSR route and can be tourism destination with its tea plantation.

As Bandung is also beautiful, it is also the way Jakartan to visit Bandung more rather than visiting foreign destination.

It is not intended to boost the industrialization

Bandung

Jakarta-Bandung highway is also already dense

 

[UKBengali]

Nope bro, it is wrong to say HSR will be used for people live outside Dhaka to work and study at Dhaka. It will be quite expensive for that. HSR tickets is much expensive than commuter line. Bangladesh just need commuter line like Greater Jakarta Commuter line.

Greater Jakarta commuter line is also used by people living outside Jakarta like Bogor, Serpong, and Bekasi which are cities inside West Java province to commute. The ticket is only around 1/4 USD and quite cheap. With that price our state owned railway can still make profit. While Jakarta-Bandung HSR tickets price will likely be around 8 USD.

It depends how far people are travelling on the HSL and if you have enough demand, you can get the price down a fair bit as there is a lot of fixed costs that do not rise no matter how much.

Dhaka is a city of over 20 million and Chittagong is a city of 10 million(I thought 5 million mistakenly) and there are other cities like Narayanganj(2 million) along the route. In total around 35 million people will live in just the cities that the route has stops in.

Dhaka to Ctg in one hour!

How long does it take to get from Dhaka to Chittagong by train? Around six hours, one would say. You could add an extra couple of hours, if a delay arises.

www.thedailystar.net

.

From this estimate done by the planners, it will cost 2,000 Taka for a one way trip from Dhaka to Chittagong which is 25 US dollars. While this may be expensive and unaffordable for daily commutes for all but maybe the highest paid white-collar workers, with the advent of high-speed internet and remote-working, it should be economical for someone to live in Chittagong(cheaper than in Dhaka) and commute 1-2 days a week into his Dhaka Office for work.

Companies may even be willing to subsidise tickets etc as they will benefit by having access to a larger potential pool of employees.

The other massive benefit as I have mentioned is the use of the HSL for freight traffic during the night.

All in all 11.2 billion US dollars, with a relatively good deal in terms of local content and local participation, is a no-brainer for the benefits it will bring to BD.

 

[Indos]

It depends how far people are travelling on the HSL and if you have enough demand, you can get the price down a fair bit as there is a lot of fixed costs that do not rise no matter how much.

Dhaka is a city of over 20 million and Chittagong is a city of 10 million(I thought 5 million mistakenly) and there are other cities like Narayanganj(2 million) along the route. In total around 35 million people will live in just the cities that the route has stops in.

Dhaka to Ctg in one hour!

How long does it take to get from Dhaka to Chittagong by train? Around six hours, one would say. You could add an extra couple of hours, if a delay arises.

www.thedailystar.net

.

From this estimate done by the planners, it will cost 2,000 Taka for a one way trip from Dhaka to Chittagong which is 25 US dollars. While this may be expensive and unaffordable for daily commutes for all but maybe the highest paid white-collar workers, with the advent of high-speed internet and remote-working, it should be economical for someone to live in Chittagong(cheaper than in Dhaka) and commute 1-2 days a week into his Dhaka Office for work.

Companies may even be willing to subsidise tickets etc as they will benefit by having access to a larger potential pool of employees.

The other massive benefit as I have mentioned is the use of the HSL for freight traffic during the night.

All in all 11.2 billion US dollars, with a relatively good deal in terms of local content and local participation, is a no-brainer for the benefits it will bring to BD.

HSR is expensive, even Indonesia prefer to build medium speed train on Jakarta-Surabaya railway. It only cost around 4 billion USD for 715 km long. Despite that, our government is still delaying the project and look like waiting for our 200 km train prototype program to finish its development in 2024-2025 inshaAllah.

Not to consider how devastating pandemic to airways business, we should give them time to recover before making another competitor for them.

HSR is more about convenience. China cannot even get profit from their HSR. How can you pay the loan if the project is not even profitable ???

Look like there is no opposition coming from the media or parliament regarding this Bangladesh project ??

You dont need HSR to do freight service, with standard railway you can do that and make the service 24 hours, not just on the night.

 

[UKBengali]

HSR is expensive, even Indonesia prefer to build medium speed train on Jakarta-Surabaya railway. It only cost around 4 billion USD for 715 km long. Despite that, our government is still delaying the project and look like waiting for our 200 km train prototype program to finish its development in 2024-2025 inshaAllah.

Not to consider how devastating pandemic to airways business, we should give them time to recover before making another competitor for them.

HSR is more about convenience. China cannot even get profit from their HSR. How can you pay the loan if the project is not even profitable ???

Look like there is no opposition coming from the media or parliament regarding this Bangladesh project ??

You dont need HSR to do freight service, with standard railway you can do that and make the service 24 hours, not just on the night.

Like I say it is impossible to know the exact profitability/loss of a HSR as there are so many "hidden" economic benefits that cannot be accurately calculated.

Like I already mentioned in terms of population numbers as a ratio of total BD population, we cannot compare profitability from China/Indonesia to what will happen in BD. They are all different countries and their population spread, infrastructure and economic situations are all different.

As long as the HSL adds to BD economic growth, it will raise GDP, allow government to collect greater tax revenue and so pay back the loan.

BD has extremely low external debt/gdp ratio of 13-14% and adding an extra 1% from a project like this will not stress the government's finances. Indonesia by contrast is at 39%.

If in the end the line is not profitable, then 1/4 of BD population has this line on their doorstep that they can use for recreational trips for centuries to come.

 

[Indos]

Like I say it is impossible to know the exact profitability/loss of a HSR as there are so many "hidden" economic benefits that cannot be accurately calculated.

Like I already mentioned in terms of population numbers as a ratio of total BD population, we cannot compare profitability from China/Indonesia to what will happen in BD. They are all different countries and their population spread, infrastructure and economic situations are all different.

As long as the HSL adds to BD economic growth, it will raise GDP, allow government to collect greater tax revenue and so pay back the loan.

Anyway, BD has extremely low external debt/gdp ratio of 13-14% and adding an extra 1% from a project like this will not stress the government's finances. Indonesia by contrast is at 39%.

It is your country project, I dont have anything to say

 

[UKBengali]

It is your country project, I dont have anything to say


View attachment 728492

External debt to gdp ratio I mentioned before and you stated total debt to gdp ratio?

Please understand that BD is different and nothing like Indonesia in a lot of ways. Indonesia is a different country to BD and the two cannot really be compared. What works for one may not work for another and vice-versa.

BD is also a quasi-dictatorship and unitary country(homogenous). People have accepted this for stability and economic growth.


PS - Just checked and Indonesia has a foreign debt of 413 billion US dollars at end of 2020, compared to 44 billion US dollars for BD. Indonesia GDP is 1.1 trillion dollars in 2020, compared to 318 billion US dollars. Indonesia has nearly 10 times the foreign debt as BD with an economy 3.5x as big. I only mentioned this to highlight that this project would not stress BD government finances that much.

 

[Shorisrip]

Both Indos and UKBengali are right to an extent. The train won't allow daily commute of workers in the first 2 decades, simply because the fare would be too expensive, despite lower time. It'll be used on a one-time basis however, and will likely always sell out or be close to 75% capacity due to the big population as UKBengali has illustrated. Ultimately, this is a project that definitely won't be profitable in the short term, but will also pay long-term dividends. The government should prioritize other areas, but should plan for this to be implemented by 2035 at the lowest cost possible. I personally feel that they should electrify the existing lines first, then implement the high-speed rail project when the time is ripe. River-dredging works that are currently going on need to be more efficient. as ultimately inner-waterway routes are the cheapest modes of cargo transport, and can provide the biggest economic gains.

 

[UKBengali]

Both Indos and UKBengali are right to an extent. The train won't allow daily commute of workers in the first 2 decades, simply because the fare would be too expensive, despite lower time. It'll be used on a one-time basis however, and will likely always sell out or be close to 75% capacity due to the big population as UKBengali has illustrated. Ultimately, this is a project that definitely won't be profitable in the short term, but will also pay long-term dividends. The government should prioritize other areas, but should plan for this to be implemented by 2035 at the lowest cost possible. I personally feel that they should electrify the existing lines first, then implement the high-speed rail project when the time is ripe. River-dredging works that are currently going on need to be more efficient. as ultimately inner-waterway routes are the cheapest modes of cargo transport, and can provide the biggest economic gains.

Like I say even if BD agrees to this now, it will not be ready till 2030 at the earliest to take paying passengers.

If you take the 30 year repayment time it may well be profitable over this time.

There is one more thing that no-one has talked about and that is enhancing the image of BD to foreigners both in terms of tourists and businessman.

All these unknown hidden economic benefits, that are impossible to accurately calculate, mean that it is not possible to say any one line is actually a loss for the government that built it. China has no real idea whether it's HSLs will actually be net-losses over the long term in terms of many decades.

 

[Indos]

External debt to gdp ratio I mentioned before and you stated total debt to gdp ratio?

Please understand that BD is different and nothing like Indonesia in a lot of ways. Indonesia is a different country to BD and the two cannot really be compared. What works for one may not work for another and vice-versa.

BD is also a quasi-dictatorship and unitary country(homogenous). People have accepted this for stability and economic growth.


PS - Just checked and Indonesia has a foreign debt of 413 billion US dollars at end of 2020, compared to 44 billion US dollars for BD. Indonesia GDP is 1.1 trillion dollars in 2020, compared to 318 billion US dollars. Indonesia has nearly 10 times the foreign debt as BD with an economy 3.5x as big. I only mentioned this to highlight that this project would not stress BD government finances that much.

Foreign debt is combination of government and businesses debt. This we are talking about government debt alone.

Bangladesh Government Debt to GDP

Bangladesh recorded a Government Debt to GDP of 28.20 percent of the country's Gross Domestic Product in 2022. This page provides - Bangladesh Government Debt To GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

Indonesia government has huge stimulus budget financed by debt in 2020 due to pandemic

Indonesia Government Debt to GDP

Indonesia recorded a Government Debt to GDP of 39.30 percent of the country's Gross Domestic Product in 2023. This page provides - Indonesia Government Debt To GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

 

[UKBengali]

Foreign debt is combination of government and businesses debt. This we are talking about government debt alone.

View attachment 728497

Bangladesh Government Debt to GDP

Bangladesh recorded a Government Debt to GDP of 28.20 percent of the country's Gross Domestic Product in 2022. This page provides - Bangladesh Government Debt To GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

Indonesia government has huge stimulus budget financed by debt in 2020 due to pandemic

View attachment 728498

Indonesia Government Debt to GDP

Indonesia recorded a Government Debt to GDP of 39.30 percent of the country's Gross Domestic Product in 2023. This page provides - Indonesia Government Debt To GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

OK, no worries bro.

You do have some valid points and I do take them on board.

We shall have to agree to disagree here.

Like I say BD government just does what it wants and there is no opposition to it, and while I do not like their foreign policy and domestic thuggery, I am mainly in agreement with their economic policies.