A Japanese company has withdrawn from the bidding for one of the most controversial contract packages (CP) on MRT Line-1 despite being the lowest bidder, citing prolonged delays in implementing Bangladesh's first underground metro-rail project.
Sources say Kajima Corporation, whose bid was based on cost estimates prepared nearly two years ago, has informed the government that carrying out the works under current conditions would be difficult due to the volatile global situation and the impact of conflicts in the Middle East.
"The company said executing the work at its proposed cost of Tk 50.55 billion was no longer feasible because more than two years had passed since the bid was submitted," says an official familiar with the matter.
According to sources, Kajima also cited disruptions in global supply chains and rising material costs, which made its original financial proposal for CP-5 unworkable.
The company submitted a letter to the Dhaka Mass Transit Company Limited (DMTCL) managing director on June 1 seeking withdrawal from CP-5, and also met the secretary of the Road Transport and Highways Division on Wednesday.
The withdrawal may pave the way for a fresh tender.
DMTCL had earlier proposed to Japan International Cooperation Agency (JICA), the project's financier, to cancel some bids of MRT-1, including CP-5, on grounds of proposing an exorbitant rate than the package's revised cost and seek permission for an open tender.
Kajima's bid itself was around 26-percent higher than the engineer-estimated cost, while the second-lowest bid was about 20 per cent higher than the lowest offer.
However, JICA rejected the proposal.
DMTCL has been facing difficulties with several contract packages of MRT Line-1 and MRT Line-5 North as only a few Japanese companies participated in those biddings and some lowest bidders' proposals were two to three times higher than the revised cost estimates in the development project proposals (DPPs).
Based on evaluated bids, the authorities estimated the cost of MRT Line-1 alone at Tk 942.84 billion, compared with the original estimate of Tk 526.61 billion.
Sources say Kajima became lowest bidder among only three participating Japanese companies.
CP-5 involves the construction of the interchange section linking the elevated and underground portions of the 31.24-kilometre MRT Line-1 metro rail between Purbachal's 300-Foot Road and the underground station at Nadda.
Following a review during the interim government's tenure, DMTCL found limited participation in most contract packages of MRT Line-1 and MRT Line-5 North.
It also estimated the combined cost of the two projects at around Tk 1.84 trillion, effectively delaying their implementation.
The MRT Line-1, Bangladesh's first subway, is planned to run from Dhaka Airport to Kamalapur, with a branch line connecting Purbachal.
smunima@yahoo.com
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