Bigger WB loan, currency devaluation increase urban resilience project cost

Government projects tend to witness increases in implementation costs for a myriad of reasons, including changes in design and land prices and tendering delays.

However, one approved yesterday cited an instance of the cost rise inducer to be an increase in the loan amount and depreciation of the Bangladeshi taka against the US dollar.

The Urban Resilience Project of Bangladesh attempts to strengthen the capacity of government agencies to respond to emergency events and strengthen systems to reduce the vulnerability of future building construction to disasters in Dhaka and Sylhet.

Its cost rose 24.43 per cent to Tk 536.65 crore in a revised proposal from the original cost of Tk 429.90 crore.

Of it, World Bank will provide a loan of Tk 501.50 crore while the government will bear the remaining cost of Tk 35.15 crore.

The loan amount has increased to $59 million from $53 million alongside the currency exchange rate to Tk 85 per US dollar from Tk 77 when the project was first approved in 2015. 

The Executive Committee of the National Economic Council (ECNEC) approved the project revision at a meeting virtually chaired by its chairperson, Prime Minister Sheikh Hasina, from her official Gono Bhaban residence.

Ministers, state ministers and high officials concerned joined from the NEC Conference room at Sher-e-Bangla Nagar in the city. The ECNEC endorsed one new project and revisions to three others.

Briefing reporters after the meeting, Planning Minister MA Mannan said Dhaka city was an area prone to earthquakes, focusing which a map would be prepared under the urban resilience project identifying risky zones.

This map will be the basis for the fire service and civil defense to conduct rescue activities during disasters such as earthquakes, he said.

Rajdhani Unnayan Kartripakkha is implementing the project, scheduled to be completed by April 2022.

Of the projects witnessing revisions, one over the infrastructural development of Rajshahi University had its cost increased by Tk 147.12 crore to Tk 510 crore following re-estimations in expenditures for construction and designs.

The initial estimate was made in 2014 and the new one as per market prices of 2018. The project is scheduled to be completed by June 2022.  The remaining project to have been revised was on widening the approach road and development of necessary infrastructures of Bangabandhu Sheikh Mujib Safari Park, Gazipur.

Its cost increased to Tk 239.04 crore from Tk 70.32 crore for a rise in land prices in the past two years as well as inclusion of additional expenses. The project is scheduled to be completed between January 2017 to December 2021.

The new project is on "conservation and development of local species of fish and snails" involving Tk 202.04 crore.

The Department of Fisheries will implement the project within June 2024 in 49 upazilas under 10 districts in the southwestern region of the country.