Letters in Economic Research Updates
Economic Analysis of Under Sleeper Pads (USPs) for Enhanced Railway Infrastructure and Economic Growth in Bangladesh: A Case Study of the Dhaka-Chattogram-Coxâs Bazar Corridor
Abstract
Shamema Akter
This study examines the economic significance of implementing Under Sleeper Pads (USPs) in Bangladesh’s railway infrastructure, focusing on the Dhaka-Chattogram-Cox’s Bazar corridor. With increasing demands on rail systems and the need for sustainable, cost-effective infrastructure solutions, USPs present a promising technology. The study assesses the lifecycle benefits of USPs, including cost savings, enhanced track stability, reduced ballast degradation, and their impact on economic growth, particularly in relation to GDP per capita.
Using an Ordinary Least Squares (OLS) linear regression model on 28 years of time-series data from the IMF and project sources, the study explores the relationship between GDP per capita and USP installation. Data includes cost components such as ballast and maintenance expenses, gathered from project records and market sources. Key findings indicate that USP implementation yields significant lifecycle savings, with a Net Present Value (NPV) of USD 18.6 million, an Economic Internal Rate of Return (EIRR) of 18.3%, and a Benefit-Cost Ratio (BCR) of 1.63. The positive correlation with GDP per capita suggests that USPs not only enhance railway efficiency but also support broader economic development. Future recommendations include expanding USP applications across other high-traffic rail corridors and conducting ongoing economic evaluations to maximize cost-effectiveness. Limitations include the model’s low explanatory power, indicating potential influences from other factors; further studies could explore external variables impacting railway performance.