Despite having two dozen ongoing projects including the Padma Bridge rail link and the Bangabandhu Bridge over the Jamuna River, the Ministry of Railways has proposed a big cut to its development allocation for the current FY2023-24 thanks to its waning spending appetite.
The ministry, the fourth-largest holder of development funds for FY24, has requested the Planning Commission to trim its allocation in the revised plan to Tk 131.18 billion from Tk 149.60 billion. This represents a cut of around 12 per cent.
Officials say that when major development spenders like the railways seek such sharp cuts, it negatively impacts the overall implementation of the Annual Development Programme (ADP).
Besides, the railway ministry has requested that roughly half of the proposed Tk 18.42 billion cuts be applied to foreign funding. This, officials say, would put further strain on the country's stressed foreign exchange reserves. Under the current fiscal year's Tk 2.74 trillion development budget, the ministry is overseeing 24 projects. These include mega-projects like the Padma Bridge Rail Link (Tk 392.47 billion), the Dohazari-Cox's Bazar-Ramu Railway Line (Tk 180.34 billion) and the Bangabandhu Railway Bridge (Tk 167.81 billion).
"Initially, the railway ministry demanded a huge amount of Tk 149.60 billion in development funds," said a senior Planning Commission official. "But, after five to six months of the current fiscal year, they have proposed to cut their budget outlay by Tk 18.42 billion to Tk 131.18 billion, which is unfortunate."
He said the proposed Tk 18.42 billion could be allocated to other sectors or ministries facing fund shortages.
Meanwhile, the Planning Commission has begun revising the current fiscal year's Tk 2.74 trillion ADP due to lower-than-expected execution of development projects in the first half of FY24.
"Since the Railway Ministry failed to execute its development projects to the expected level in the first half of FY24, it is now surrendering Tk 18.42 billion in funds from the original ADP allocations," said another Planning Commission official.
The railway ministry implemented 32 per cent of its ADP allocation during the July-December period of the current fiscal year.
According to the revised funding request submitted by the railway, it proposes a sharper cut of Tk 9.85 billion to Tk 94.92 billion from the available Tk 104.77 billion in project aid from foreign sources.
However, it has reduced its demand for government funding by Tk 8.58 billion to Tk 36.25 billion, down from the current allocation of Tk 44.83 billion.
In the revised ADP (RADP) of FY23, the government allocated Tk 125.44 billion to the Bangladesh Railway.
Over the past 15 years, the Bangladesh Railway, under the Ministry of Railways, has invested billions in developing its passengers and freight services.
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