Road transport ministry wants to buy 130 BRT buses – each with 177% cost hike

The road transport and bridges ministry has prepared a highly ambitious proposal to purchase 130 luxury buses at Tk420 crore to operate Bus Rapid Transit (BRT) services on the Airport-Gazipur dedicated lane expected to be ready by this fiscal year.

The initial estimate was a little over Tk58 crore for procuring 50 articulated buses, but the government dropped the plan last year. 

The bus procurement pricing will now go up by more than seven times once the third revision proposal for the BRT project, which has been running for a decade, secures approval from the Executive Committee of the National Economic Council (Ecnec).

Thus, each bus will cost Tk3.23 crore with a 177% hike from the previous estimate, according to the third revision proposal for the BRT project. 

The ministry has also estimated costs of other essential items for operating BRT services. They are an intelligent transportation system, GPS, ticketing systems, and various equipment for traffic control, including CCTV, traffic lights, towing trucks, emission testing system and solar street lights. The prices of all these items have also soared between 118% and 210%. 

The Dhaka Bus Rapid Transit Company Ltd (Dhaka BRT) has sought a sum of Tk707 crore for the procurement of 130 buses and all other equipment.

The year-wise financial and physical target plan of the proposal revealed that Tk181 crore had been allotted for the procurement and installation of such components in the original project.

The government is to spend an additional Tk526 crore, 290% higher than the allocation in the original project, as shown in an analysis of the project revision proposal.

Transport experts have blamed inefficiency in project implementation, indecision of the authorities concerned and a lack of experienced manpower for operating BRT services for the massive rise in the cost of procuring project components. 

Stating that the authorities have much more of an interest in procurement than in completing the BRT route, they fear that any unplanned purchases may turn into a liability. 

Talking to The Business Standard, Transport expert Professor Shamsul Hoque questioned the logic behind purchasing 130 buses instead of 50. "Where will the additional buses be kept?"

Dhaka BRT sources said in 2019, they constructed a depot of 20,000 square metres for 50 articulated buses at a cost of Tk38 crore - although the initial allocation for the work was Tk11.41 crore.

At a recent press conference, Shafiqul Islam, managing director of Dhaka BRT Company Ltd, said the modern and luxury buses that are going to be purchased will cost a little higher.

Asked where these buses will be kept and at what interval the buses will run, he told The Business Standard that a final decision has not been made yet. 

Shafiqul Islam said he could not say anything about the purchase of buses until the revision proposal gets approval.

The BRT project, taken up in 2012 at a cost of Tk2,040 crore, saw its launch dates shift and cost estimates creep upward – at latest count, around Tk4,268 crore has been estimated with a 109% hike with a completion date set for December this year. 

However, BUET Professor Hadiuzzaman said the launch of the BRT corridor might get further delayed as the authorities are yet to reach a final decision over the bus procurement and operation.

It will take several years to procure buses after completing all formalities, from making specifications to an agreement with the selected international bidder, he noted.

The discussion over buying buses in the final year of the project implementation reflects the indecision of the authorities, he also said.

Terming the decision to buy buses by the BRT company not reasonable, Hadiuzzaman said the government's job is to improve the corridor and give private companies responsibility for their management. 

So those who will operate the BRT service should buy buses, he noted.

BRT is not a simple infrastructure but a system which requires operations and maintenance every day even and at every moment. There is a lack of skilled people to manage and operate such a public transport system.

He also said the BRT company should complete the development of the corridor and call for international tenders and select the quality service provider at the lowest cost to operate the buses.

The revised development project proposal revealed that the original project had an allocation of Tk67.50 crore for the component "procurement of Intelligent transportation system (ITS), GPS and ticketing." Another component, "procurement of various equipment for traffic control including CCTV, traffic light", had an allocation of Tk24.16 crore.

The BRT company has merged the two components worth Tk91.66 crore into a single component worth TK200 crore, 118% higher than the original allocation.

Another component, "Procurement of various equipment for traffic control including towing trucks, emission testing", has been allocated Tk22.1 crore in the revised proposal, more than double that of the Tk10.52 crore originally arrived at.

The cost of solar light has reached Tk65 crore, triple the original allocation of Tk20.97 crore.