The government has approved three major metro rail projects after prolonged delays, but the wait has come at a steep price: the estimated costs of the two previously approved routes have risen by Tk1.1 lakh crore to more than Tk2 lakh crore.
The Executive Committee of the National Economic Council (Ecnec), chaired by Prime Minister Tarique Rahman on Wednesday, approved revised costs for MRT Line-1 from Airport to Kamalapur and MRT Line-5 Northern route from Hemayetpur to Bhatara. It also approved the new MRT Line-5 Southern route from Gabtoli to Dasherkandi.
The two delayed projects were approved during the previous government for a combined cost of less than Tk1 lakh crore. Their revised costs have now more than doubled.
Both MRT Line-1 and Line-5 Northern will be financed through Japanese loans from the Japan International Cooperation Agency (JICA), while Line-5 Southern will receive financing from the Asian Development Bank (ADB) and South Korea.
State Minister for Planning Md Zonaid Abdur Rahim Saki said delaying approval of the JICA-funded projects further could push up costs because of rising loan interest rates.
He said the interest rate on JICA loans would exceed 3 per cent after this month and could rise above 3.5 per cent within another six months.
Line-1 cost jumps 117.64%
MRT Line-1 was approved in 2019, with completion originally scheduled for December 2026. Construction was inaugurated on 2 February 2023 but stalled following the mass uprising of 5 August 2024.
Japanese contractors later said they would not undertake the work at the original cost of Tk52,561 crore 43 lakh and proposed a revised estimate.
The interim government led by Muhammad Yunus did not take a decision on the proposal. After the BNP came to power, a committee was formed to assess the justification for the increased cost. The committee subsequently deemed the increase justified.
The revised Development Project Proforma (DPP) puts the cost at Tk1,14,394 crore 89 lakh, up Tk61,833 crore 46 lakh, or 117.64 per cent.
The project will become Bangladesh’s second-largest in terms of cost after the Rooppur Nuclear Power Plant.
Government financing has increased from Tk13,111 crore 11 lakh to Tk30,552 crore 26 lakh, while JICA financing has risen from Tk39,450 crore 32 lakh to Tk83,842 crore 63 lakh.
The completion deadline has been pushed back to 2033, seven years later than the original target.
The revised DPP cites delays caused by the Covid-19 pandemic, procedural complications associated with Bangladesh’s first metro rail project and delays in opening financial bids for different packages.
Line-1 will also become the country’s first underground railway. Its 19.872-kilometre airport-Kamalapur section will be entirely underground, with 12 stations.
The 11.369-kilometre Purbachal section, from New Market to Pitalganj Depot, will have seven elevated and two underground stations.
Line-5 northern route cost also doubles
MRT Line-5 Northern, approved in 2019 at Tk41,238 crore 54 lakh, has now been revised to Tk89,848 crore 36 lakh.
The increase of Tk48,609 crore 82 lakh represents a 117.87 per cent rise.
Government financing will increase by 84.22 per cent to Tk22,330 crore, while Japanese loans will rise by 131.89 per cent to Tk67,518 crore.
The 20-kilometre Hemayetpur-Bhatara route was originally scheduled for completion by 2028. The revised deadline is 2032.
Saki attributed the sharp increase in costs partly to changes identified during the detailed feasibility study.
“Although various aspects of the projects were determined based on the preliminary feasibility study, the detailed feasibility study found that stations would have to be constructed much deeper in some areas,” he said.
He also cited changes in station depth and other components, exchange-rate movements, inflation, higher labour costs and increased VAT as factors behind the higher estimates.
Although the loans are denominated in yen, Saki said exchange-rate changes against the
US dollar had affected project costs.
Asked whether pressure from any country influenced the approval, he said the government was making decisions by prioritising national interests and noted Bangladesh’s long-standing cooperation with Japan.
New Line-5 southern route approved
Ecnec also approved MRT Line-5 Southern, a 17.20-kilometre route from Gabtoli to Dasherkandi, at a cost of Tk45,503 crore 77 lakh.
Government financing will account for Tk15,197 crore 66 lakh, with Tk30,306 crore 10 lakh coming through loans from the ADB and South Korea.
The ADB will finance consultancy and civil packages, while South Korea will finance the systems package.
The project will run from September 2026 to August 2033.
Of the route, 13.10 kilometres will be underground and 4.10 kilometres elevated. It will have 15 stations, with the project proposal estimating a journey time of around 28 minutes between Gabtoli and Dasherkandi.
First electric railway gets go-ahead
Ecnec also approved a Tk3,822 crore project to introduce electric traction on the Narayanganj-Dhaka-Joydebpur railway route.
Excluding metro rail, it will be the country’s first electric train project. The government will provide Tk942 crore and foreign loans will account for Tk2,880 crore. The project is scheduled for completion by 2031.
Ecnec also approved projects involving a new dual-gauge railway from Bogura to Sirajganj, district highway development in the Rajshahi and Chattogram road zones, Barishal Cantonment infrastructure, naval accommodation in the Khulna naval area, the Khulna sewerage system, improved working conditions and social protection for textile and leather workers, and electricity distribution in Monpura.
Excluding the two revised metro projects, the combined cost of the other projects approved at the meeting exceeds Tk1.68 lakh crore.
The meeting was also informed about 15 additional projects costing less than Tk50 crore each that had been approved by the planning minister.
