Cost increases as DPP ‘mistakenly’ excluded essential allocation

The cost of a road widening project in Khagrachari has increased by Tk 261.23 crore as some “essential allocations were mistakenly not included in the development project proposal (DPP).’’

The 38-km long Baraiyarhat-Hiako-Ramgarh road in Khagrachari is being widened from 5.5 meters to 7.3 meters to develop the road network between the Chattogram Port and the Ramgarh Land Port.

Upgrading the 38-km road is expected to further boost import and export activities between Bangladesh and the Indian state of Tripura through the land port.

But the road widening project was being implemented without any allocation for customs duty (CD) and VAT-IT in the DPP, according to a Planning Commission report.

As a result, project expenditure has been increased on different heads including allocations for CD and VAT-IT, consultancy (local), general site facilities and utility shifting, said this month’s report of the Project Evaluation Committee (PEC) of the Planning Commission’s Road Transport Wing.

The Tk 845.53 crore project’s cost has now been increased by Tk 261.23 crore to Tk 1106.76 crore, according to the PEC report.

The project was scheduled to be implemented by December 2024. Out of the initial Tk 845.53 crore project cost, Tk 581.19 crore funding was set to come from India’s third line of credit to Bangladesh which was supposed to bear the rest of the cost.

Now, after the increase of the project cost to Tk 1106.76 crore, the government will provide Tk 512.69 crore while Tk 594.06 crore would come from India’s third line of credit to Bangladesh.

In reply to a query over why no fund was allocated initially in the DPP for customs duty and VAT-IT, a senior RHD official told The Business Post, “This essential part was mistakenly not included in the original DPP.”

“Hence, the DPP has been amended and allocation has been made in the revised DPP. Besides, utility shifting, removal of 357 old poles and installation of 326 new poles, construction of new electric lines on 15km road, and construction of side roads for vehicular movement have increased the total project cost,” he added.

The project was approved in a meeting of the Executive Committee of the National Economic Council (Ecnec) on August 18, 2020.

Project officials think the two-way trade between Bangladesh and India through Ramgarh Land Port will increase once the Baraiyerhat-Hiako-Ramgarh road is widened and the 1.9km long bridge connecting Ramgarh of Khagrachari with Sabrum in Tripura is constructed. The bridge is called Bangladesh-India Friendship Bridge-1.