Bangladesh and China are going to sign a loan deal on the Padma Bridge Rail Link on April 28, Railways Minister Mazibul Hoque said yesterday.

“The loan deal is going to be signed after a long wait. We have completed all preparations,” he said, adding that the deal would be signed in Beijing.

He was speaking at a seminar at Bangladesh Institute of Governance and Management in the capital's Agargaon.

On behalf of Bangladesh government, Economic Relations Division (ERD) of the finance ministry will sign the $2.6 billion deal with the Exim Bank of China, Amzad Hossain, director general of Bangladesh Railway, told The Daily Star yesterday.

A five-member team comprising officials from both ERD and railways ministry, and led by Zahidul Haque, additional secretary of ERD, will leave the country by April 26, he said.

He said the preparatory work for the project has started and some of the works including detail survey of the project have already been done.

The project will be connected with the Padma bridge and will enable a direct rail link between Dhaka and the southern parts of Bangladesh, particularly the Mongla port and the Benapole land port. The rail link project is scheduled to be implemented by 2022.

“We hope that a portion [from Mawa to Bangha] of it would be completed when the government plans to open the Padma bridge,” he said. The government plans to open the long-cherished bridge by December 2018.

Of the 26 projects committed by China during its president's visit to Dhaka in 2016, the rail link is the most pressing one, receiving the highest amount of loan. Primarily, the Chinese loan amount for the project was estimated at US $3.14 billion.

After a long delay, the Chinese State Council, the highest policymaking body of the East Asian nation, in February gave the consent to the loan for the project.

The financing for the Padma rail link project will come in the form of preferential buyers' credit (PBC), 15 percent of which will be provided by the government.

As a result, the Exim Bank's loan for the project would be US $2.6 billion. The loan carries 2 percent of the interest rate.