Why DMTCL wants competitive bidding for MRT-1, MRT-5

The Dhaka Mass Transit Company Limited (DMTCL) has halted ongoing procurement for MRT Line-1 and MRT Line-5 (Northern) and plans fresh international tenders after bids came in nearly double the approved project costs.

Why it wants competitive bidding:

• Bids for MRT-1 and MRT-5 came in about 90–100% higher than the costs approved in the original Development Project Proformas (DPPs), raising concerns over value for money.
• Limited bidder participation meant prices were driven by a small group of firms, rather than by genuine market competition.
• Existing tender structures discouraged capable international contractors, shrinking the bidder pool and weakening price discovery.
• Excessive engineering and contractual constraints narrowed eligibility, pushing up risk premiums in bids.
• Japan International Cooperation Agency (Jica)-funded procurement rules require Japanese consultants, whose tender designs effectively limit participation by non-Japanese firms.
• As a result, only a handful of Japanese contractors bid for major packages, reducing competitive pressure.
• Consultants' revised estimates significantly exceeded original DPP figures, weakening the DPP's role as a cost benchmark.

MRT-1, MRT-5 face re-tender as bids far exceed approved costs

• For MRT-1, major packages originally estimated at about Tk37,656 crore later attracted bids of more than Tk80,000 crore.
• For MRT-5 tunnel works, packages budgeted at Tk3,000–4,000 crore received bids ranging from Tk11,000 crore to Tk15,000 crore.
• DMTCL believes open international competition can align prices with regional and global metro rail benchmarks.
• A competitive process allows better assessment of constructability, risk allocation and contract structure, which directly affect bid prices.
• Re-tendering after revising the DPP is seen as the only legally and financially defensible option when bids far exceed approved costs.
• Competitive bidding supports life-cycle cost-based planning, rather than focusing only on upfront construction costs.
• Broader competition can strengthen local industry participation, reducing long-term reliance on foreign contractors.
• Open tenders also improve project governance and transparency, helping prevent cost escalation from the feasibility stage onwards.