Govt to renegotiate cost of 3 Jica-funded projects: Planning adviser

Planning Adviser Wahiduddin Mahmud said the government will try to reduce inflated costs in various components of the ongoing metro rail projects financed by the Japan International Cooperation Agency (Jica).

The projects have come under scrutiny after a review by Dhaka Mass Transit Company Limited (DMTCL) found higher expenses in various components of the projects. 

Speaking to reporters after the Executive Committee of the National Economic Council (Ecnec) meeting at the NEC conference room in Sher-e-Bangla Nagar today, he said, "The agreements for the ongoing metro rail projects with Japan were signed under the previous government. Since the contracts are already in place, our position is weak. The deals with Jica and Japanese contractors cannot simply be canceled."

"The agreements for the ongoing metro rail projects with Japan were signed under the previous government. Since the contracts are already in place, our position is weak."

Planning Adviser Wahiduddin Mahmud

The meeting today approved 11 projects worth Tk9,362 crore, including a project to establish Rabindra University on 100 acres of government land in Sirajganj, on certain conditions linked to environmental conservation.

Regarding the excessive costs in the metro rail projects, the planning adviser said, "If the projects are delayed, the loan interest will increase, and Jica is generally unwilling to reduce costs once an agreement is signed. That is why the government is now trying to show, through comparisons with other countries, how much higher our costs are and whether renegotiation is possible."

He added, "Given the contracts, there is little we can do, but we are still exploring ways to save as much as possible."

He explained that all approvals, tenders, and contracts for these foreign-funded projects were handled by the previous government. Recently, a new director at DMTCL reviewed the components of the projects and found that the costs of building metro rail in Bangladesh are significantly higher than in other countries.

Among the ongoing Japan-funded projects, MRT Line-1 has an estimated cost of Tk53,977 crore. The project includes a 19.872 km underground line from the airport to Kamalapur with 12 underground stations, plus an 11.369 km elevated line from Notun Bazar to Pitalganj Depot with seven elevated and two underground stations. The total length is 31.242 km, and construction began in February 2023.

MRT Line-5 (Northern Route) has an estimated cost of Tk41,238 crore. The 20 km line will include 6.5 km elevated and 13.5 km underground track, with 14 stations – nine underground and five elevated. Construction started on 4 November 2023 and is being implemented in 10 packages.

MRT Line-6 (Motijheel to Kamalapur extension) has an estimated cost of Tk33,472 crore. Metro rail service has already started on the Uttara–Motijheel route.

Rabindra University approved with conditions

The Ecnec meeting also approved a project to establish Rabindra University on 100 acres of government land in Shahjadpur, Sirajganj, on certain conditions.

The planning adviser said that although the project costing Tk519 crore was approved, clearance must first be obtained from the Department of Environment. The approval must come within two months.

Environmentalists and water experts have opposed the site, located at the edge of the Chalan Beel wetland, warning that construction there could disrupt the natural water flow of more than 50 rivers and hundreds of canals that drain into the Jamuna.

He noted that although the university was launched in 2016, it has been operating in scattered rented facilities across Shahjadpur, disrupting academic activities. The proposed land was classified as non-agricultural in 2018, with the condition that environmental clearance must be obtained — a condition reiterated in this approval.

ADP implementation slowed in July

The planning adviser said ADP (Annual Development Programme) implementation in July was slower than the same month last year, which is not a good sign.

Last year's July slowdown was due to political unrest, but this year implementation should have picked up pace. He said many projects still do not have contractors assigned, and some project directors have voluntarily transferred out.

He added that while ADP targets this year are realistic, ministries and divisions must use their allocations, and no excuses will be accepted. The ADP will likely be revised in December–January due to the upcoming election in February, but an advance budget outline should also be provided.

Total 11 projects approved at Ecnec

The meeting approved 11 projects worth Tk9,362 crore, including second phase of mini-stadium construction across various upazilas (1st revised), sustainable agricultural development in Rangpur region through modern technology expansion, modernisation of 33/11 KV outdoor substations in industrial zones, and second revised modernisation of Keru & Co Ltd.