Two more metro rail construction projects are currently underway in Dhaka. The government has estimated a total cost of BDT 937.99 billion for these projects. The process of evaluating and verifying the bids is now in progress. However, due to conditions set by the lender, Japan International Cooperation Agency (JICA), only Japanese companies or joint ventures were allowed to participate in the bidding. In addition, there was no provision for re-inviting bids to lower the quoted prices if they were high. Taking advantage of this, Japanese contractors submitted their proposals, which, after analysis, officials of Dhaka Mass Transit Company Limited (DMTCL) say could push the total cost for constructing the two metro rails to nearly BDT 2 trillion—almost double the government’s original estimate.
Meanwhile, to reduce costs and make the bidding process more competitive, the government has begun discussions with JICA. Officials from the Ministry of Road Transport and Bridges have also said that, if necessary, they are considering taking loans from the World Bank or the Asian Development Bank (ADB) as alternatives for financing the metro projects.
One of Dhaka’s new metro rail lines is MRT Line-1, which will connect the Airport to Kamalapur and Natun Bazar to Purbachal. The estimated cost for this project is BDT 525.61 billion. The other is the Hemayetpur-Bhatara route (MRT Line-5, Northern Route), with a projected cost of BDT 412.38 billion. Both projects have already started building depots, and the bidding process for starting fieldwork is underway.
DMTCL officials, who are responsible for building and operating the metro rail, said that according to contractors’ proposals, the cost of constructing MRT Line-1 will exceed BDT 940 billion. The cost for MRT Line-5, Northern Route, will approach BDT 900 billion. This means the per-kilometer construction cost will exceed BDT 30 billion. In comparison, the first metro rail in Dhaka (MRT Line-6), connecting Uttara to Motijheel, cost around BDT 16 billion per kilometer to build.
Transport experts have long described the construction cost of MRT Line-6 as one of the highest in the world. Communication infrastructure specialist and Bangladesh University of Engineering and Technology (BUET) Professor Dr. Shamsul Hoque alleged that, although Japan provided loans for Dhaka’s metro rail projects on easy terms, it has taken extra money by imposing various conditions during the bidding process.
Speaking to Bonik Barta, Dr. Shamsul Hoque said, “For the two metro rail projects in Dhaka currently under discussion, Japanese companies were the consultants. They prepared the cost estimates. They also prepared the tenders along with JICA. Now, if Japanese contractors submit bids that are twice the estimated cost, then someone has clearly been dishonest. Either the consultants gave false estimates, or the contractors submitted inflated bids. In both cases, these are Japanese companies.”
Sharing his personal view, Dr. Hoque added, “I believe that although Japan offers loans at low interest with long grace periods, it ends up taking extra money by attaching multiple conditions to the tenders. If Japan refuses to relax these conditions and continues to block competitive bidding, then we should avoid such projects with them. Instead, we should consider financing from the ADB, the World Bank, or other institutions.”
A recent DMTCL analysis compared the per-kilometer construction costs of metro rail projects built in recent years across different countries. The findings show that the cost per kilometer is BDT 17.47 billion in Sydney, Australia; BDT 6.72 billion in Turkey; BDT 4.48 billion in Ivory Coast; BDT 7.84 billion in Seoul, South Korea; BDT 7.40 billion in Bangkok, Thailand; and BDT 15.52 billion in Ho Chi Minh City, Vietnam.
Officials from Dhaka Mass Transit Company Limited (DMTCL) and the Ministry of Road Transport and Bridges consider the construction cost of the two ongoing metro rail projects in Dhaka—over BDT 30 billion per kilometer—to be unusually high. To address this, the government has tasked Sheikh Moinuddin, Special Assistant to the Chief Adviser assigned to the ministry, with negotiating with JICA to bring down the cost.
Regarding the steps being taken by the government to reduce construction expenses, Sheikh Moinuddin told Bonik Barta, “From past experience, we’ve seen that when projects are implemented with JICA loans, they attach certain special conditions to the tenders. Because of these conditions, no one except Japanese contractors can participate in the bidding process. So now we’re trying to implement metro projects not just with JICA loans, but also with financing from institutions like the ADB and the World Bank. I’m personally ensuring that nothing irregular happens in preparing tender notices, evaluating bids, or selecting contractors. I’m in constant contact with the DMTCL Managing Director regarding this matter.”
He also said discussions with JICA are ongoing to lower the construction costs. “We’ve already had two or three meetings with them. Some issues related to construction costs have been discussed. We’re trying to make the tenders competitive. Our main goal is to build Bangladesh’s metro lines at the lowest possible cost. We want all qualified and capable contractors to get the opportunity to take part in the construction work here.”