The government’s monitoring agency has identified procurement irregularities, questionable contractor selection and concerns over consultants’ effectiveness in the Improving Urban Governance and Infrastructure Project (IUGIP), including alleged financial losses exceeding Tk20 crore.
The Implementation Monitoring and Evaluation Division (IMED) of the planning ministry found that a debarred contractor had been awarded work during the ban period despite not being the lowest bidder.
Its intensive monitoring report also flagged the purchase of substandard products at unusually high prices without testing and questioned the contribution of consultants engaged in the Local Government Engineering Department (LGED) project.
The findings have raised questions about procurement oversight, the justification for consultancy spending and weaknesses in project planning and implementation.
According to the report, Tk119.56 crore was allocated for Management, Design and Supervision (MDS) consultants, of which Tk46.83 crore had been spent by April 2026.
The project employs 103 personnel under this component, including 13 national key experts and 82 national non-key experts.
However, IMED found that roads and drains across the country were being constructed using largely identical designs with minor modifications. Several building designs also contained flaws.
The agency recommended reassessing the justification for the substantial allocation for design preparation in the Development Project Proposal (DPP).
The report also questioned the effectiveness of resettlement and social safeguard consultants, saying their work had produced no visible benefits despite their responsibility for various social protection measures.
The consultants played no active role when land-related complications required changes to infrastructure designs, it said.
Some newly constructed roads were also higher than neighbouring residential areas, creating risks of localised waterlogging. Yet the consultants had made no recommendations or taken any initiatives to address the difficulties facing affected residents.
Although the project has required no land acquisition so far, four resettlement and social safeguard specialists remain engaged.
Considering the project’s implementation progress and the availability of local engineers, IMED recommended reviewing whether these positions were necessary.
The report further found that although eight specialists had been appointed for market and open-space development, after nearly two years and 10 months of implementation, market construction was under way in only six municipalities, alongside work on one park.
Construction of two other markets had yet to begin because of a lack of coordinated planning and repeated design changes, delaying project implementation.
Responding to the findings, IUGIP Deputy Project Director Imteaz Zaherul Haque defended the consultants’ performance.
“The consultants are performing their assigned duties properly. We do not have sufficient staff of our own, so it is not possible to run the project without their assistance. They are directly involved in supervision, quality control, bill verification and various other activities,” he told TIMES.
Procurement irregularities and financial losses
IMED identified five audit objections involving financial discrepancies exceeding Tk20 crore in FY2023-24.
The report found that awarding work to a debarred contractor during the ban period, while bypassing the lowest bidder, caused a loss of Tk50.32 lakh to the government.
Failure to deduct income tax in accordance with regulations resulted in a further loss of approximately Tk69 lakh.
The failure to deposit performance security by a contractor who had not completed work within the stipulated period caused an additional loss of Tk22.68 lakh.
The largest financial discrepancy involved the procurement of substandard dustbins at unusually high prices without testing, resulting in losses exceeding Tk18.77 crore.
Haque disputed the assessment of the dustbins’ quality.
“The dustbins may have been considered substandard because they were manufactured in China, but the products are of good quality,” he said.
He also rejected the allegation that a contractor had been awarded work while under a ban.
“Being the lowest bidder alone does not guarantee that a contractor will get the work. Contractors are selected after verifying tender conditions, previous experience and the necessary documents. The contractor concerned was not under any ban when the work order was issued,” he said.
Feasibility study reveals discrepancies
IMED also identified discrepancies between the feasibility study’s infrastructure targets and the quantities ultimately approved.
The study proposed developing 1,500 kilometres of roads and constructing 900 kilometres of drains across 63 municipalities. However, the approved targets were substantially lower, at 1,037.81 kilometres of roads and 437.8 kilometres of drains.
The report found that although public demand and technical and environmental considerations had been assessed during the identification of subprojects, their economic feasibility had not been directly evaluated.
Although the feasibility study stipulated that economic assessments would be conducted before each stage of implementation, IMED found no evidence of such assessments during field inspections.
The project also included decisions on the quantities and costs of roads and drainage infrastructure, along with land acquisition. In practice, however, no land acquisition has been required.
The monitoring report reiterated that economic feasibility had not been directly assessed when subprojects were identified, despite the study’s requirement for such assessments before successive stages of implementation.
Field inspections again found no evidence that the requirement had been fulfilled.
Asked about the overall findings, Haque said the project authorities had submitted their explanations to IMED.
“They (IMED) prepared the report from their perspective. We have also submitted a written response presenting our arguments,” he said.
