BR’s poor show yet again
In August 2011, the government took up a Tk 1,946 crore project to procure 70 Metre Gauge (MG) locomotives to mitigate the growing crisis of rail engines and expanding the services of Bangladesh Railway.
The locomotives were supposed to be added to the BR fleet within June 2017, but the project authorities could not even complete the bidding process by that time.
The deadline was extended twice before the project went through a major revision in 2018, when the costs jumped to Tk 2,659.33 crore. The deadline was extended, again, this time to June 2024.
Later in October 2018, BR signed a deal with South Korean Hyundai Rotem Company for the procurement. As per the agreement, Hyundai Rotem was supposed to arrange the required funds.
Now, the HRC, however, wants to pull out from the project after the government asked it to manage soft loans instead of non-concessional loans as agreed by both sides earlier, causing the project's fate to hang in the balance.
Four other Bangladesh Railway projects find themselves in a similar situation, mainly due to complexities over funding, further exposing the BR's poor skills in project implementation.
Of the 37 ongoing projects of BR, 26 have been extended at least once.
The four projects were taken up to renovate 21 MG locomotives, provide technical assistance for developing rolling stock operations, and expand the Joypurhat-Iswardi and Akhaura-Sylhet rail lines.
Over the last 10 years, Tk 5.15 crore has already been spent after the project to procure the 70 MG locomotives.
Failing to get contractor through two tenders, the project authorities floated the third one in December, 2014, and took four years to pick Hyundai Rotem.
As per the 2018 agreement, the company was supposed to supply all the locomotives to BR within five years of the contract taking effect.
In February, 2020, the Standing Committee on Non-Concessional Loan approved the Tk 1,946-crore fund. The railway ministry was supposed to get $280 million in non-concessional loans from two foreign banks in this regard.
The project, however, got stalled since the loan agreement could not be signed.
After the project authorities sought opinions from the Economic Relations Division on the draft loan agreement, the ERD in August last year forwarded the Finance Division's opinion on the matter.
The Finance Division opined that soft loans from South Korea or other sources should be managed, instead of taking the non-concessional loans which come with higher interest rates.
When the project authorities asked Hyundai to manage the soft loans, it declined it. It also said it would cancel the contract.
On January 4 this year, the project implementation committee decided to take opinions from the Implementation Monitoring and Evaluation Division and the Central Procurement Technical Unit in this regard, said a BR official.
THE FOUR OTHER PROJECTS
In July 2019, the government approved the technical assistance project -- worth Tk 45 crore -- for carrying out feasibility studies and detailed designs for four establishments, including a workshop for diesel-electric multiple unit (DEMU) trains.
The Asian Development Bank was supposed to give Tk 31.36 core in loan for the work. The deadline for the project was set for June 2021.
A consultant was also selected, but the project steering committee, led by the rail secretary, decided in November 2020 not to build the workshop for DEMU trains and drop this portion from the work scope of the consultant.
Besides, the deadline was extended till June 2022.
But the ADB asked to cancel the bidding process and later informed authorities that it would no longer finance the project.
In such a situation, the railways ministry asked the BR to implement the project with government funds.
Project Director Taslim Ahmed Khan said the project has to be revised due to the changes and that they have already submitted a revised proposal in this regard.
Now, the project cost would be Tk 37.98 crores and the deadline June 2024.
Asked whether the project was facing uncertainty, he said, "It's impossible for me to say this right now. Several meetings will be held before the revision proposal is passed. The project's fate will be known then."
In July 2019, the government approved the project for renovating 21 MG locomotives at a cost of Tk 242.14 crore to solve BR's engine crisis. June 2022 was set as the deadline.
PD Tabassum Binte Islam said they floated tender thrice over the last three years. Except for the first, no one submitted any proposal. The submitted proposal, however, did not meet the requirements, she said.
"PIC [Project Implementation Committee] members in a meeting [in November last year] opined that the project should be ended," she said.
PIC's opinion would be placed before the project steering committee, which will take the final decision, she also said.
The two other projects -- Tk 14,250.61 crore Joydebpur-Ishwardi double-line project and the Tk 16,104.45 crore Akhaura-Sylhet dual gauge project -- were approved three years ago.
Chinese contractors were selected through the direct procurement method without any competitive bidding. Deadlines of the projects are December 2024 and June 2025 respectively.
But the Prime Minister's Office, following a committee's review, in November 2020 directed the BR to slash Tk 1,495.52 crore from the costs of the Joydebpur-Ishwardi project.
The PMO also directed the BR to reduce the costs of the Akhaura-Sylhet project by Tk 3,354.31 crore.
But contractors of both projects declined to proceed. The Chinese government too declined to provide loans for the Joydebpur-Ishwardi project.
The ministry in November last year wrote to ERD asking it to search for alternative fund sources for both the projects following the directives of PMO.
BR officials said Japan has shown interest in financing the Joydebpur-Ishwardi project. But even if Japan is on board, it will take three years to start the physical work, they said.
There has been no development regarding the other project's funding, the officials added.