17.1 Introduction

17.1.1 An adequate and efficient transport system is a pre-requisite for both initiating and sustaining economic development. Investment in improving transport efficiency is the key to expansion and integration of markets - sub-national, national and international. It also helps the generation of economies of scale, increased competition, reduced cost, systematic urbanisation, export-led faster growth and a larger share of international trade.

17.1.2 The transport system of Bangladesh consists of roads, railways, inland waterways, two sea ports, maritime shipping and civil aviation catering for both domestic and international traffic. Presently there are about 21,000 km of paved roads; 2,706 route-kilometres of railways (BG-884 km and MG -1,822 km); 3,800 km of perennial waterways which increases to 6,000 km during the monsoon, 2 seaports and 2 international (Dhaka and Chittagong) and 8 domestic airports.

17.1.3 In Bangladesh, development and maintenance of transport infrastructure is essentially the responsibilities of the public sector as are the provision of railways transportation services and air transport. The public sector is involved in transport operations in road, inland water transport (IWT) and ocean shipping alongside the private sector. In the road transport and IWT sub-sectors, the private sector is dominant. In ocean shipping, however, public sector still predominates, although the private sector has considerably increased its role in this sector in recent years. Recently private sector has also been involved in domestic air transport and railway in a very limited scale.

17.2 Growth of Different Modes of Transportation

17.2.1 Bangladesh witnessed rapid growth of transport since Independence. The overall annual growth rate was nearly 8.2 per cent for freight transport and 8.4 per cent for passenger transport. Even then the transport intensity of the Bangladesh economy is considerably lower than that of many developing countries.

17.2.2 The relative roles of transport modes are evolving with road transport expanding at the expense of railways and inland water transport because of its inherent technical and cost advantages. According to Bangladesh Transport Sector Study (1994), the volume of road transport increased by 88 per cent from 1985 through 1993, whereas the volume of transport by water as well as rail declined in almost equal proportion.

  1. With the commissioning of the Bangabandhu Bridge, the volume of road transport for both passenger and freight is expected to increase quite substantially. In order to enable the beneficiaries to avail of its full potentials, the bridge will generate demand for construction of by-passes and roads and bridges in different strategic parts of the country. Thus, the future expansion programme of each of the surface transport modes in providing transport services depends crucially on government policy and investment decisions keeping in view the past transport development trend and the recently changed scenario in the transport sector. Modal shares of three surface transports- road, inland water way and railway in 1997 (estimated on the basis of 1993 and 1996 data) are 72 per cent, 17 per cent and 11 per cent respectively for passengers and 65 per cent, 28 per cent and 7 per cent respectively for freight (Table 17.2).


17.3 Major Constraints


17.3.1 The development of surface transport system in Bangladesh is constrained by three distinct sets of factors. These are physical (e.g., difficult terrain, periodic flooding, poor soil condition, siltation and erosion of rivers, inherited management weaknesses of BR etc.), low investments and maintenance and inadequate institutional framework (four ministries, nine transport sector parastatals and lack of co-ordination and autonomy of transport parastatals).


17.4 Transport Sector Allocation in Past Plans


17.4.1 The public sector allocation for the transport sector during the past Plans in base-year prices of each plan period are shown in Table 17.1


Table 17.1

Allocations in Past Plans

(at base year prices in respective Plans)

(in million Taka)



First Five Year Plan


Two Year Plan


Second Five Year Plan


Third Five Year Plan


Fourth Five Year Plan


1995 to 1997

(in current prices)


Bangabandhu Bridge


Water Transport (including ports & shipping)








































Allocation as per cent of Total Public Sector Outlay













* This amount includes Tk. 2,620 million allocated by NICAR for thana connecting roads and Tk. 1,033 million allocated for the roads of Chittagong Hill Tracts from special fund.


17.5 Financial Performance of Transport Sector Parastatals


17.5.1 Public sector involvement in the transport system of Bangladesh consists of ownership and operation of nine parastatals. The parastatals have poor financial performance except the two seaports. The poor financial performance of the parastatals and their weak capital structure created a financial liability on the government of around Tk. 2,000 million annually till 1995. However, the situation has been improving in recent years. To address the problem, the government has been pursuing the two-pronged policy of privatisation and restructuring of public sector transport parastatals for achieving improved administrative, management and operational performances.


17.6 Fifth Five Year Plan


17.6.1 Objectives: To achieve an average GDP growth rate of 7 per cent per annum the transport sector growth rate is projected to increase by 7.51 per cent per annum. Keeping in view the increased volume of domestic traffic as well as the accommodation of future traffic from the Asian Highway and Trans-Asian Railway, the main objective of the Fifth Plan will be to develop a balanced and integrated transport network through adoption of strategies/programmes as described below.


17.6.2 Strategy : For transport network development strategy, an optimal mix of "market integration approach" and "poles of development approach" will be adopted. Operational significance of this mixed strategy is that development efforts will be concentrated on five main corridors: Dhaka-Chittagong, Dhaka-Northwest, Dhaka-Khulna, Dhaka-Sylhet and Khulna-Northwest with special emphasis on Dhaka-Chittagong, Dhaka-Northwest and Khulna-Northwest arterial corridors. Besides these, the road linkages passing through Khulna, Barisal, Bhola, Lakshmipur and Chittagong will be improved. This development strategy is to be reinforced by the rural transport development strategy. Rural transport system will be developed by integrating inland water transport sub-sector with the existing road transport system and within the road transport sub-sector by adding off-road internal access dimension. To this network development strategy, urban transport sector dimension will be added. The elements of this strategy to be pursued during the Fifth Five Year Plan will be as follows:

a. The `Arterial Corridors' will be designated as 'Strategic Corridors' and required investment will be made for the development of bridges, ferries and road upgrading works on these corridors to raise them to international standards so that these can carry the regional and inter-regional traffic;

b. The two sea ports will be further developed and linked to Dhaka, which connects all the four major regions of the country;

c. Railway linkages will be established between the east and west zones of the country;

d. The development strategy for the rural transport will be reoriented for efficient external access through optimal integration of road and inland water transport and off-road internal accesses;

e. Improvement in resource mobilisation will be made through introduction of user charges and fees by the agencies;

f. Improvement of the management and operation of transport parastatals, including eventual privatisation of all or parts of specific transport parastatals will be aimed at;

g. Provision of required incentive packages for the private sector for greater participation, not only in transport services, but also for infrastructure building will be made;

h. Identification and implementation of preventive, emergency and post-disaster mitigation measures will be made. To minimise road accident, road safety administration will be adequately strengthened;

i. Broadening the framework of transport development strategy by incorporating the vital urban transport dimension starting with improvement in transport services of greater Dhaka city will be undertaken;

j. Assurance of deficit-free operation of Bangladesh Railway as envisaged in Railway Recovery Programme will be fulfilled;

k. Improvement of sub-standard ferry operation on major road networks will be made;

l. Introduction of necessary institutional reforms to address the operational constraints of the port transit system with special reference to containers and privatisation measures for port transit system will be made;

m. Adequate care will be taken while developing transport network and service so that these do not cause environmental pollution and affect ecological balance; and

n. Provision of duty-free or low duty import of engines and spares for mechanisation of country boat will be made.


17.6.3 Priority investment programmes/projects : In conformity with this strategy the following programmes will be undertaken and completed :

a. Completion of the Bangabandhu Multipurpose Bridge project along with the access roads;

b. Completion of Dhaka Eastern By-pass;

c. Construction of five major road bridges, two in the Mongla/Khulna - Northwest corridor and one in Dhaka - Sylhet corridor and one over the Dakatia at Chandpur and another over the Laokhali at Patuakhali ;

d. Completion of Jamuna Railway Link Project. ;

e. Completion of the construction of ongoing arterial roads projects including their rehabilitation and maintenance;

f. Undertaking the rehabilitation and maintenance of core network of Railway, including signalling and telecommunication systems;

g. Construction of container terminals at Chittagong sea-port and expansion and modernisation of container handling facilities at sea-ports;

h. Development of a new cargo-cum-general container composite port at Dhaka, and inland Railway container depots at Dhaka, Tongi and Joydevpur;

i. Maintenance of appropriate draft of sea-ports as well as inland navigational channels through appropriate dredging;

j. Development of a deep water sea-port at Chittagong to cater to domestic as well as regional needs;

k. Undertaking programmes for the development of ferry links to off-shore islands between Shariatpur and Chandpur and mechanisation of country boats;

l. Development of M.A. Hannan Airport at Chittagong and Osmani Airport at Sylhet up to the standards of international airport; encouraging private sector participation in air transport;

m. Initiation of programmes for the addition of a second runway at the international airport at Dhaka and building another airport at Trishal;

n. Development of the airports of Barisal, Khulna, Bogra, Rajshahi, Saidpur and Patuakhali;

o. Improvement of the urban transport system starting with Dhaka city through construction of new infrastructure and development of mass transit system;

p. Extension of road network in Chittagong Hill Tracts; and

q. Planning road and railway links and ports to the end of regional and sub-regional co- operation.