Ecnec approves three metro rail projects costing Tk2.5 lakh crore

Infographic/TBS

Two Japanese-funded metro rail projects that had been stalled for nearly a year and a half are set to resume after their revised cost proposals were approved today (16 September), while a new metro rail project funded by the Asian Development Bank (ADB) and South Korea has also been approved.

The revised proposals for the two metro projects were approved at a meeting of the Executive Committee of the National Economic Council (Ecnec) today. The committee also approved the new MRT Line-5 Southern project, which will run 17.20km from Gabtoli to Dasherkandi, including underground sections.

The Ecnec meeting was held at the Secretariat with Prime Minister Tarique Rahman in the chair.

TBS infographics

The meeting approved a total of 12 projects, including a Tk3,822.51 crore electric commuter train project.

Planning State Minister Jonaed Abdur Rahim Saki and Planning Division Secretary SM Shakil Akhter briefed journalists on the approved projects at a press briefing held at the NEC conference room in Sher-e-Bangla Nagar.

The MRT Line-5 Southern project has been estimated to cost Tk45,503 crore. The ADB and South Korea will provide Tk30,306 crore in loans for its implementation. The government has set a target of completing the project by August 2033.

The two Japanese-funded projects whose revised proposals were approved are MRT Line-1 (Airport-Kamalapur) and MRT Line-5 Northern (Hemayetpur-Bhatara).

Implementation of the two projects, which began in 2019, made little progress during the interim government period after tender bids came in significantly higher than the costs approved in the original project proposals.

The cost of the 31.24km MRT Line-1 project has increased by 117.64% to Tk114,394.89 crore.

Although the project was originally scheduled for completion this year, the new target is 2033.

The 20km Japanese-funded MRT Line-5 Northern project has been re-estimated at Tk89,848.36 crore, representing a 117.87% increase from its original approved cost of Tk41,238.54 crore in 2019.

Combined, the three metro rail projects will cost Tk2,49,746 crore, according to the approved proposals.

At the briefing, the state minister and secretary explained why the cost of the Japanese-funded projects is roughly twice or more than that of the newly approved MRT Line-5 Southern project, which is being financed by ADB and South Korea.

The secretary said Japan International Cooperation Agency (JICA) generally implements projects according to its own international standards.

"Under these projects, work has to be carried out through designated vendor panels, international contractors and approved suppliers. As a result, restrictions on technology selection, equipment imports and contracting structures make the costs comparatively higher," he said.

Saki said that although the metro rail project had initially been taken up earlier, no major policy decisions were made on it for nearly two years during the interim government period.

"Some utility relocation work was completed during that period, but there was no progress on the core project implementation or financing agreement. As a result, the formal agreement was delayed, and the passage of time brought significant changes to the overall cost and financing terms," he said.

He said the government found after taking office that the Japanese government was rapidly changing the terms of its previously agreed loans, particularly interest rates.

"Global economic conditions, wars, disruptions to energy supplies and volatility in international markets have prompted development partners to tighten their lending terms," he said.

As a result, Japan had very limited scope to offer significant concessions on interest rates or other loan conditions, he said.

Electric commuter train also approved

The Ecnec meeting approved a total of 12 projects, including a Tk3,822.51 crore electric commuter train project on the Joydebpur-Dhaka-Narayanganj route.

Saki said the project would mark Bangladesh's move towards an electric railway system.

The trains will be capable of high speeds similar to metro rail but will operate on conventional railway tracks. Their maximum speed will be around 160kmph.

Saki added that construction of the required dual-gauge track for the commuter trains is already around 70% complete.

Once implemented, the project will allow high-speed electric trains to operate on existing railway lines, adding a new dimension to transportation between Dhaka and surrounding urban and suburban areas, he said.