The government is reviewing how it sets construction rates for public projects as rising prices of materials, labour, and other inputs increasingly make it difficult for agencies to complete projects within approved budgets, officials familiar with the matter said.
The review could lead to a more market-oriented benchmark for the Schedule of Rates, or SoR, or rate schedule which government agencies use to prepare project cost estimates and tender documents.
The issue is expected to be finalised by August 10 and subsequently placed before the Executive Committee of the National Economic Council, or ECNEC, for consideration, the officials said.
The proposed system is intended to bring government estimates closer to prevailing market prices and reduce the gap between the costs assumed when a project is approved and the prices contractors and suppliers face when work begins.
"Soon after ECNEC, we may publish it," Mr Kabir Ahmed, chief of the Physical Infrastructure Division at the Planning Ministry, told the FE.
The review comes as volatile construction costs have complicated project implementation.
In some cases, contractors have been reluctant to bid when government estimates are substantially below prevailing market prices, officials said. Agencies may then have to retender projects, delaying implementation.
When costs rise significantly after a project has been approved, agencies may also need to amend the Development Project Proposal, or DPP, the government's principal project-planning document.
Such changes can further delay implementation and raise the eventual cost to the state.
The government sought views from stakeholders and conducted a limited survey of construction inputs as part of its effort to develop a more reliable reference for project costs, officials said.
The proposed approach would establish benchmarks based more heavily on actual market conditions, with regular updates to prices of major inputs rather than relying primarily on fixed rates that can quickly become outdated.
The government also wants to reduce differences among the rate schedules used by various agencies and establish a more uniform national framework, which officials said could eventually be known as the Bangladesh Schedule of Rates.
Construction costs can vary sharply depending on location, terrain, transportation distances and site conditions.
A rate that accurately reflects construction in Dhaka may not adequately capture the cost of building roads, bridges or other infrastructure in a remote district or a wetland area.
"Haor construction is not similar to road construction in the plains," a senior official of the Public Works Department, or PWD, said.
Transporting cement, steel, bricks, aggregates and other materials to remote areas, mobilising equipment and maintaining construction operations in difficult terrain can substantially increase project costs, the official said.
For this reason, the government has therefore incorporated market surveys, location-specific adjustments and more frequent updates to input prices, officials said.
The review came from Public Works Department, Local Government Engineering Department, Roads and Highways Department, Bangladesh Railway and Department of Public Health Engineering, as well as the Bangladesh Bureau of Statistics.
The PWD maintains a Schedule of Rates and detailed rate analyses covering manpower, materials, civil works and electromechanical works. Its 2022 SoR was revised for a second time in January 2026, partly to reflect changes in value-added tax.
But under the new system, the cost metrics for major goods will be homogenous and there are some technical procurements that vary department to department would remain different.
The LGED has also updated its Schedule of Rates, with its 2022 edition revised in August 2025. Its estimating system uses current market rates for materials and labour and allows individual tender rates to be compared with market prices during tender evaluation.
The RHD similarly maintains a Schedule of Rates and rate analyses for construction items used by engineers to estimate contract values.
Under the existing practices, PWD describes its Schedule of Rates as an authoritative reference used by government and semi-government agencies as well as private-sector builders.
A more frequently updated and market-based SoR could therefore become more than an accounting reference.
It could influence whether projects attract bidders, how contracts are evaluated and how effectively the government controls development spending.
At the same time, officials admit that no single rate can perfectly reflect the cost of every project across Bangladesh.
jasimharoon@yahoo.com