Cost estimate too high

Local experts are working to scale down the construction cost of the proposed Dhaka Elevated Expressway to $25 million (Tk 175 crore) for each kilometre from $75 million estimated by a foreign consultant.
AECOM Australia Propriety Ltd, the international consultant for the Dhaka Elevated Expressway, estimated the total cost at $2 billion for 26 kilometres or $75 million (Tk 525 crore) per km. It includes a 4 km approach road.
In local and regional context, an expert committee on the DEE at a recent meeting decided to cut the construction expenses down to one-third of the amount the consultant assessed.
Bangladesh Bridge Authority (BBA), the implementing agency for the DEE, has hired two teams of experts -- one from the Infrastructure Investment Facilitation Centre (IIFC), a state-owned company, and the other from Bangladesh University of Engineering and Technology (Buet) -- to recalculate the cost.
The technical team from Buet will ascertain the actual cost while IIFC will chalk out a financial model on how to get the return on the investment.
BBA Secretary Mosharraf Hossain Bhuiyan said, "We will not take the consultant's estimation into consideration."
"If the cost is high, the concessionaire (private investor) will demand a much longer concession period," he said.
The BBA had objected to the exorbitant cost but the consultant argued that the cost was estimated in keeping with the international standards, said Bhuiya.
Prof Jamilur Reza Chowdhury, head of the expert committee, said, "The cost reduction will not compromise quality of the expressway. We will bring the estimated cost down to one-third."
India has recently built a four-lane 9 km elevated way (Silk Board to Electronic City) in Bangalore, he said, the construction cost of the facility was $20 million a kilometre. One more example of the similar cost is Narsimha Rao elevated way in Hyderabad.
Prof Chowdhury said the expert committee requested the consultant to bring the cost down to 30 percent of what they had estimated. But the consultant had argued their payment was already made and it required additional fees to do the job, he added.
According to Prof Md Shamsul Hoque, another committee member, the per kilometre cost of recently built Tejgaon overpass was less than Tk 100 crore, Tk 76 crore for 1.6-kilometre Khilgaon flyover, Tk 80 crore for proposed Kuril interchange (flyover), and Tk 135 crore for proposed Jatrabari-Gulistan Flyover while Tk 80 crore for the proposed Mirpur-Zia Colony flyover.
The government, as its equity share, will provide the concessionaire with the land, facilitate handover of the route, carry out relocation of utility services, remove any occupancy and rehabilitate the affected people.
The expert committee decided that the government would not invest any fund but do everything to hand over the route to the concessionaire.
The government will handover one-third of the route at the time of signing the agreement, one-third after six months and the rest after one year of the signing.
The Buet team including civil and structural experts will carry out environmental impact assessment, land survey, land scheduling, and help rehabilitation to rationalise the cost.
Despite repeated attempts, neither Nazrul Islam, the executive director of IIFC, nor any of his deputies were available for comment on how they would do the job.