The Ministry of Railways failed to spend any single penny of foreign assistance allocation of Padma Bridge Rail Link Project (PBRLP) last fiscal year due to change in utility services relocation and design.
Besides, the project cost has also increased by Tk 280 crore due to change in the design of the project and 8% of the government fund for PBRLP was spent at the end of 2019-20 fiscal year because of delay of the shifting utility services.
The project implementation situation discussed at recent Railway Ministry development project review meeting, presided over by Md Nurul Islam Sujon.
Besides, another information has come up in a recent analysis of Bangladesh Railway also showed the high cost of the project.
The Railway Minister Nurul Islam Sujon said due to the spread of coronavirus we hope that implementation of Padma railway project rate to be increased, he said.
An official of Railway Ministry said Bangladesh Awami League 14-party alliance government has given utmost importance to the development of railways.
Therefore, it increases the allocation, along with railway ministry has taken one development project after another for real progress of this sector. One of these first track projects is the PBRLP, official also said.
According to the railway ministry review meeting, project assistance fund was Tk 2,000 crore and government fund Tk 1297 crore. The railway ministry could not spend any fund from Chinese assistance.
Under this 215.22 km railway will be constructed from Dhaka to Jessore via Mawa, Bhanga, Narail.
Although in the railway ministry review, there are many questions about the cost of the PBRLP. In addition, the construction cost per kilometre of the project is several times higher than other ongoing projects.
It can be seen that single-line broad gauge railway will be constructed on Dhaka-Mawa-Jessore route under Padma bridge rail connection project. The contractor for the project is China Railway Engineering Corporation (CREC).
Exim Bank of China is providing loan to this project which is being implemented on government to government system basis.
An agreement was reached with CREC in August 2016 to build the railway on a conditional loan or buyer’s credit.
Buyer’s credit is a short-term credit available for an importer (buyer) from overseas lenders such as banks and other financial institutions for goods they are importing. The overseas banks usually lend the importer basing on the letter of comfort (a bank guarantee) issued by the importer's bank.
At that time, the contract value of the project was estimated at Tk 28,852.56 crore. In other words, the cost of construction of railways per kilometre in this project is Tk 127.49 crore. Although the construction cost of the railway may increase further.
Meanwhile, a contractor was appointed in 2015 to build the railway from Khulna to Mongla Port. Railways signed an agreement with India's Ircon International Company in October of that year. The contract price for the construction of the 64.75 km broad gauge railway is Tk 1,026.75 crore. In other words, the cost per kilometre is Tk 19.75 crore. The Loan of India (LoC) project is being implemented.
Another ongoing project under LoC is construction of third and fourth line from Dhaka to Tongi and double line dual gauge railway from Tongi to Joydebpur.
The agreement to build the 48 km railway was signed in July 2016. The Indian railway contractor Afcons Infrastructure Limited and Kalpataru Group are jointly constructing the two railways at a cost of Tk 1,393.06 crore. It costs Tk 29.04 crore per kilometre. Due to the dual gauge, the cost is a bit higher than the Khulna-Mongla Port Railway Project, said the railway officials.
Apart from this, a broad gauge railway from Chilahati to Chilahati border is being constructed to facilitate rail link with India. The contract price of the construction of the 9.36 km long broad gauge railway is Tk 68.80 crore. In other words, the cost per kilometre is only Tk 7.35 crore. Max International of Bangladesh is constructing this railway.
The Padma Rail Link project is being constructed at a cost 3.42 times more than the Dhaka-Tongi third and fourth lines and the Tongi-Joydevpur double line dual gauge project. Compared to the construction of the Khulna-Mongla port railway, the average cost of the Padma rail link project is 6.51 times. Besides, the cost is about 16 times more than the Chilahati-Chilahati border project.
An official involved in the project, speaking on condition of anonymity, said the cost of constructing a new route is normal. Because all other infrastructures including stations and buildings have to be rebuilt.
The Padma rail link route is also brand new. So the cost is a bit high, official also said.
However, several former senior railway officials said that the Khulna-Mongla Port railway, like the Padma rail link project, is completely new. Therefore, there is no opportunity to identify the Padma rail connection project as an exception.
It may be mentioned that the construction cost of Padma Rail Connection Project has been increased by one percent in 2018.
The construction cost of the Dhaka-Mawa-Jessore railway stood at Tk 39,247 crore. Of this, China will lend Tk 21,038.79 crore. The remaining Tk 17,210.31 crore will be provided from government funds. However, in 2016, the cost of the project was estimated at around Tk 34,989 crore. In other words, the cost of the project has increased by Tk 4,256 crore before the start of construction.
Meanwhile, the cost of the project is in the process of increasing. In this case, Bangladesh Railway wants to spend Tk 1,194 crore without initial approval. Of this, acquisition of 640 acres of additional land will require Tk 940 crore. In addition, an additional Tk 252 crore will be required for utility shifting and another Tk 2 crore for third party consultants. In addition, due to the design complexity of the project, the construction cost of the railway will increase further. Apart from this, project delays may also increase due to implementation delays. These costs may have to be adjusted towards the end of the construction of the railway.
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