Project cost may rise 18pc

The project cost of Khulna-Mongla rail track is likely to be increased for the second time because of the delay in implementation, modification of components and extension of the services of consultants.

This led Bangladesh Railway (BR) to ask the Economic Relations Division (ERD) to request India to allocate an additional $80 million (or Tk 672 crore) for the project. 

The Executive Committee of the National Economic Council (Ecnec) first approved the project involving Tk 1,721.39 crore in December 2010, with a deadline to finish it by 2013 under the first Indian line of credit (LoC).

But, the BR could not execute the project on time as it failed to acquire land, forcing it to request the Planning Commission to revise the cost up to Tk 3,801.61 crore, up 120.85 percent on the original cost.

The cost increase is due mainly to the change in the alignment of the rail route, which enlarged the track's length.

In May 2015, the Ecnec approved the revised proposal and also set a new deadline, which also expired in June 2018.

Although the implementation period has elapsed for the second time, the BR has been able to use only 18.13 percent of the project cost in the last five years. 

Under these circumstances, the BR has sought additional funds and placed a proposal to the Planning Commission for a third revision. It also wrote to the ERD to communicate with India to get the allocation from the LoC. 

Regarding the cost increase, Afzal Hossain, the project director, said the extension of the consultancy services increased to 42 months from 24 months because of a revision in the design of the Rupsha bridge and the poor condition of soil at the site.

He said the land acquisition took time: the Deputy Commissioner's office of Khulna handed it on November 3, 2016 and the DC office of Bagerhat handed it on January 1, 2017. The contractor was awarded the work order on March 9, 2017 and it mobilised the workforce two months later.

Most of the land acquisition has been completed except in Mongla port area land. Formalities to hand over the land in the port area have not been completed yet.

Hossain said the contractor -- Indian Railway Construction Company Limited – relies on subcontractors. But most subcontractors are not experienced and have failed to show any progress of the project, delaying it.

An official of the ERD said they have already sent a letter to India and the fund may be allocated from the third LoC as the track will be useful for the proposed India Economic Zone in Mongla.

He said the planning ministry has the authority to endorse the cost increase of a project up to a certain level.

Once completed, the rail track is expected to boost domestic as well as sub-regional trade.