Two rail projects face uncertainty | The Daily Star
12:00 AM, June 10, 2021 / LAST MODIFIED: 05:20 AM, June 10, 2021

Two rail projects face uncertainty

China decides not to fund one of them while Chinese contractors say they won’t work on the projects as contract costs revised

Two major railway expansion projects have plunged into uncertainty as China has decided not to finance one of those and the Chinese contractors for both the projects have refused to work following downward revision of the contract prices.

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The Chinese government, through its embassy in Dhaka, said it would not fund the Tk 14,250.61-crore Joydebpur-Ishwardi double-line project for a "lack of in-depth preliminary work and insufficient feasibility study".

Meanwhile, the Chinese contractors for this project and the Tk 16,104.45-crore Akhaura-Sylhet dual gauge project informed Bangladesh Railway that they would not work in the projects following the downward revision of contract prices by the Prime Minister's Office (PMO).

These two are among the projects for which Dhaka and Beijing signed a memorandum of understanding (MoU) during Chinese President Xi Jinping's Dhaka visit in October 2016 for implementing those with Chinese assistance.

Both the projects were approved by the Executive Committee of the National Economic Council (Ecnec) more than two years ago. The Chinese contractors were selected through direct procurement method without any competitive bidding.

The latest developments will result in further delay in the implementation of the two projects and prolong people's wait for better train services from the capital to the north-east and north-west regions, officials told this newspaper.

In this situation, the railways ministry yesterday held a meeting to discuss the developments and find out solutions regarding the two projects and another one that also involves China.

It was presided over by Railways Minister Nurul Islam Sujan.

The meeting decided to send a letter to the Chinese authorities through the Economic Relations Division (ERD) for reviewing their decision regarding the Joydebpur-Ishwardi project, meeting sources told The Daily Star.

Besides, the BR will apprise the PMO of all issues relating to the Akhaura-Sylhet project in writing and seek its directive for implementing the project, they said.

CHINA'S REFUSAL TO FUND PROJECT

The Chinese Embassy in Dhaka recently informed the ERD that it evaluated the Joydebpur-Ishwardi double-line project through an independent agency and found some faults. And the Chinese government is now unwilling to fund the project.

The detailed investment estimation of the project is "missing and the unit cost is too high". Besides, the basis for prediction of the freight volume is not sufficient and the financial calculation does not reflect the actual situation, it said.

It also said revenue from the project will be low and there is uncertainty over debt repayment, sources said referring to the embassy's letter to the ERD.

China was supposed to provide Tk 8,756.75 crore for the Tk 14,250.61-crore project.

Talking to this newspaper, several BR officials said China's refusal to give the loan might have something to do with geo-politics.

Bangladesh's rail communication, especially the operation of freight trains with India, will get a boost once the double-line project is completed.

Besides, the Bangabandhu railway bridge project, which would link portions of the rail line, is being implemented with Japanese funds, and this project is being highlighted more than the rail line project.

"In this situation, China may lose interest in financing the project," a top BR official said seeking anonymity.

The Daily Star yesterday tried to contact the railways minister, Railways Secretary Salim Reza and BR Director General Dhirendra Nath Mazumder over phone, but none of them responded. They also didn't reply to messages sent by this correspondent to their mobile phones.

JOYDEBPUR-ISHWARDI DOUBLE LINE

Delay in schedules of trains connecting the capital with the north-western and southern regions have been all too common over the last few years.

The capital is linked to these regions by the single-line Joydebpur-Ishwardi section and the Bangabandhu Bridge.

On many occasions, the railways minister and BR officials said the problems regarding the delay in train schedules on this route cannot be resolved until the construction of a rail bridge and installation of the dual-gauge double line from Joydebpur to Ishwardi.

The government took up a project in January 2016 to construct a dedicated double-line rail bridge over the Jamuna river.

It then undertook the Tk 14,250.61-crore project in November 2018 to turn the 174-km Joydebpur-Ishwardi section into a dual-gauge double line. The deadline for completing the project is December 2024.

The BR completed negotiations with China Civil Engineering Construction Corporation for implementing the project and the Cabinet Committee on Government Purchase in December 2018 approved a Tk 11,586.68-crore proposal for the work.

The BR in March 2019 sent a loan application for the project to the Chinese Embassy in Dhaka through the ERD and gave  reminders for the loan seven times in the last two years.

In its last letter in January this year, the BR asked the Chinese government to expedite the process of signing the loan deal, stressing the importance of synchronisation of the two projects -- the bridge and the rail line -- to get the desired benefits.

AKHAURA-SYLHET DUAL GAUGE

The Ecnec in April 2019 approved the Tk 16,104.45-crore project to convert the metre-gauge railway line into dual gauge from Akhaura to the Sylhet section linking the capital to the Sylhet divisional headquarters.

The project titled "Conversion of Metre Gauge Rail into Dual Gauge in Akhaura-Sylhet Section of Bangladesh Railway" aims to convert 225km metre-gauge line into 239km dual gauge line by June 2025.

China is supposed to finance 66.16 percent of the total project cost.

Officials said all the procedures -- managing Chinese concurrence for funding, selection of contractor and approval of the negotiated price-- have already been completed but the project's huge cost appears to be an obstacle to its implementation as it's much higher than that of similar rail projects.

PMO FOR SLASHING PROJECT COST

In October last year, the PMO formed a committee to review the negotiated contract prices of the two projects along with another involving China.

The other project -- Joydebpur-Mymensingh-Jamalpur dual gauge conversion project -- has not been approved by the Ecnec, and negotiation with China Railway International Group has not been completed yet.

As part of measures to bring down the cost of the Joydebpur-Ishwardi double-line project, the PMO in November last year directed the BR to slash Tk 1,495.52 crore (12.91 percent) from the project's contract price of Tk 11,586.68 crore approved by the Cabinet Committee on Government Purchase.

It also asked the BR to reduce the cost of Akhaura-Sylhet project by Tk 3,354.31 crore which is 20.8 percent of the total outlay.

The BR at a meeting on December 9 last year decided to discuss the PMO's decision with the Chinese contractors for the two projects.

Both the Chinese contractors disagreed over the revised costs and conveyed it to the BR, according to railway officials.

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