MRT Line-1 slashed 91%, Line-5 down 60% in Revised ADP
The northern section of MRT Line-5 has also seen its budget fall by about 60%, while allocations for other large infrastructure schemes, including the Dhaka airport expansion and the Matarbari deep seaport, have been scaled back as spending needs fall short of earlier projections
Highlights:
- Government slashes major metro rail budgets due to stalled tenders
- MRT-1 allocation cut over 90% amid cost review
- MRT-5 Northern, airport, port projects face steep RADP reductions
- Cost reassessment freezes tenders; Bangladesh metro costs unusually high
- Rooppur unchanged; Ashulia expressway gets more funds for progress
- Tk30,000cr overall ADP cut reflects contractionary public spending
The government has slashed development allocations for two major metro rail projects by record margins, with the flagship MRT Line-1 facing a reduction of more than 90% in the revised Annual Development Programme (RADP). Officials say the cuts reflect stalled tender processes, slow implementation and an ongoing review of project costs under the interim government.
The northern section of MRT Line-5 has also seen its budget fall by about 60%, while allocations for other large infrastructure schemes, including the Dhaka airport expansion and the Matarbari deep seaport, have been scaled back as spending needs fall short of earlier projections. Project authorities say limited progress and unresolved complexities in international tenders have left little scope to use the funds earmarked for the current fiscal year.
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Meanwhile, the interim government has directed ministries and agencies to reassess several large projects amid concerns over cost escalation, slow-moving contracts and weaknesses in planning. Officials at Dhaka Mass Transit Company Limited admit that construction costs of metro rail lines in Bangladesh appear significantly higher than in comparable cities, prompting the first formal cost review with Japan's development agency, Jica. Until the review is completed, key tender processes remain on hold.
While major cuts dominate the transport sector, allocations for the Rooppur nuclear power plant have remained unchanged, and the Dhaka–Ashulia Elevated Expressway is set to receive additional funding due to faster construction progress. The Planning Commission is expected to finalise the revised allocations later this month before placing them for approval at the National Economic Council in early January.
Projects stalled for reassessment
Planning Commission officials said that since the interim government took office, spending under several projects is being reviewed. As a result, activities under MRT Line-1 and Line-5 Northern have almost come to a halt.
Dhaka Mass Transit Company Limited (DMTCL) officials said that after reviewing both ongoing and completed projects, they found that Metro Rail construction costs in Bangladesh are the highest among comparable countries – five times higher than India. Even Riyadh and Dubai have significantly lower per-kilometre construction costs despite using more advanced technology than Bangladesh.
For this reason, the cost of Bangladesh's ongoing Metro Rail projects is being reassessed. As part of that process, for the first time, DMTCL is initiating discussions with the Japan International Cooperation Agency (Jica) to review project costs. Until then, the tendering process remains suspended, meaning no significant spending will be required this fiscal year, leading to funds being returned.
MRT Line-1 project
In the current fiscal year's ADP, the Airport–Kamalapur MRT Line-1 project had an allocation of Tk8,631.43 crore. But in the revised ADP, the proposed allocation is only Tk801 crore. As a result, the project's allocation has decreased by around 90.72%.
Officials at the Planning Commission said the RADP allocation is set based on the demand submitted by implementing agencies. Since the implementing agency did not request funds for this project, the Planning Commission has proposed reducing the allocation.
MRT Line-5 Northern
The allocation for the ongoing MRT Line-5 Northern (Hemayetpur–Vatara) project is also decreasing by about 60.23%. Its original ADP allocation of Tk1,490.65 crore has been proposed to be reduced to Tk592.80 crore in the RADP.
Md Aftab Hossain Khan, project director of both MRT Line-1 and Line-5 Northern, told TBS that as tendering processes have not been completed, funds cannot yet be utilised. "International tenders involve various complexities and stages, and Dhaka Mass Transit Company Limited (DMTCL) is working on them. Because of delays in tendering, the opportunity to spend funds has narrowed, leading to the return of funds in the RADP."
Three ongoing Metro Rail projects in Bangladesh are funded by Jica. Among these, MRT-6 (Uttara–Kamalapur) is nearing completion. MRT Line-1, costing Tk53,977 crore with Jica funding, and MRT Line-5 Northern, costing Tk41238.55 crore, are currently at the tendering stage.
MRT Line-6
According to Planning Commission sources, another ongoing Metro Rail project – Line-6 (Diabari–Kamalapur) – is also seeing a reduction of around Tk324 crore. In the current fiscal year's ADP, its allocation was Tk1347.44 crore. Trains are already operating on the Diabari–Motijheel section, while work continues on the Motijheel–Kamalapur extension.
Md Abdul Wohab, project director of Metro Rail Line-6, told TBS that they assessed their needs and found they would not require the full ADP allocation this year. So part of the allocation is being returned. He added that around 72% of work on the Motijheel–Kamalapur extension has been completed, and the goal is to open it for operation in January 2027.
Matarbari Port development project
Another priority mega project of the government – the Matarbari Port Development Project – is also returning 73.32% of its allocation in the revised ADP.
Last October, Ecnec raised the project cost from Tk17,777 crore to Tk24,381 crore. By June this year, only Tk2,168.91 crore had been spent. Its original ADP allocation for this fiscal year was Tk4,068 crore, now proposed to be reduced to Tk1,085 crore in the RADP.
Hazrat Shahjalal International Airport expansion project
Planning Commission officials said that the revised ADP proposes reducing allocation for the Hazrat Shahjalal International Airport expansion project by 70.52%. It had an allocation of Tk1,039.24 crore in the current fiscal year's ADP.
Officials from the Civil Aviation Authority of Bangladesh said they did not require the full allocation this year, which is why funds are being returned. The Tk21,399 crore project had spent Tk10,533 crore up to June 2025.
BRT project
Planning Commission officials further said that in a meeting of the Executive Committee of the National Economic Council (Ecnec) last July, the proposal to increase cost and time for the 'Greater Dhaka Sustainable Urban Transport Project' (Airport–Gazipur BRT) was rejected due to weak planning and serious design flaws.
Consequently, its ADP allocation is also being returned. The project had Tk425 crore allocated in the ADP, now proposed to be reduced to Tk168.60 crore in the RADP.
Highway upgradation projects
Due to slow implementation, the Roads and Highways Department's mega projects – Hatikumrul–Rangpur Highway 4-lane upgrade (Sasec-2) and the Dhaka–Sylhet 4-lane upgrade – are also seeing reduced allocations of 16.55% and 3% respectively in the RADP.
Rooppur Nuclear Power Plant project
The allocation for the Rooppur Nuclear Power Plant remains unchanged. Its ADP allocation this fiscal year is Tk10,011.78 crore, and the Planning Commission says no reduction has been proposed.
Dhaka–Ashulia Elevated Expressway project
Among mega projects under the bridges division, the Dhaka–Ashulia Elevated Expressway has been proposed for an increased allocation. Its original ADP allocation was Tk3,342 crore, now proposed to be raised to Tk4,477 crore in the RADP.
Officials at the bridges division said implementation progress has accelerated, creating the need for additional funds to pay contractors in line with ongoing work.
Tk30,000cr cut
Planning Commission officials said the proposed allocations will receive preliminary approval in an extended meeting on 31 December, with final approval at the NEC meeting in the first week of January.
The Finance Division has already sent a letter to the Planning Commission specifying the overall size of the RADP. It proposes cutting Tk30,000 crore from government funds and foreign loans. Government fund allocation is being reduced from Tk1,44,000 crore to Tk1,28,000 crore. Foreign loan and grant allocation is being reduced from Tk86,000 crore to Tk72,000 crore.
Dr M Masrur Reaz, Chairman and CEO of Policy Exchange, said the government is already implementing a contractionary budget that has led to cuts in development project allocations.
"Downward revisions in public expenditure and ADP allocations have now become almost routine, and this slowdown is already weighing on the broader economy – particularly the construction sector, which depends heavily on public-sector development projects.
"While direct employment from public projects is relatively small and short-term, the larger impact stems from weakened demand across linked industries. As public investment loses momentum, the multiplier effects on jobs diminish, ultimately reducing the overall employment-generation capacity of public spending," Dr Reaz said.
