Under a strategic policy pivot, building Dhaka metro rail's southern route, marked as MRT-5, is being expedited to preempt two other lines' projects to set a benchmark for unit costs of metro-rail infrastructure, officials say.
Following a severe procurement crisis on the Japan International Cooperation Agency (JICA)-funded MRT line-1 and MRT line-5 (north) projects due to restrictive bidding criteria, the MRT- 5 south project could help the government understand the contractors' pricing due to scope for open tender, they say.
The government saw Japanese contractors submit bids ranging from 25 per cent to over 300 per cent above the original estimated cost in the various contract packages of the two JICA-funded projects, they add.
By advancing the southern route through an open and competitive international tendering method, the government intends to bypass single-lender procurement complexities and establish a realistic, market-driven financial baseline for future urban transit lines, civil servants concerned have said.
The Asian Development Bank (ADB) has already assured Bangladesh of providing nearly US$3.0 billion worth of funds while another lender, South Korea, is expected to provide $1.0 billion for constructing the MRT-5 line from Gabtoli to Dasherkandi.
The Planning Commission has taken initiative again to approve soon the Tk 477.21-billion project, which had been pending during the interim government's tenure.
The project had stalled for long as the previous caretaker government withheld its approval process for allegedly costing higher estimation and shortage of funds in government exchequer.
Dhaka Mass Transit Company Limited (DMTCL) prepared a Development Project Proposal (DPP) on the MRT-5 (south) with a cost of Tk 477.21 billion (US$4.9 billion).
"We have already started approval process of the MRT-5 south project. We have sent the DPP to the Planning Minister. After getting the green signal, we will work to place it before the Executive Committee of the National Economic Council (ECNEC) for getting final approval," says a senior PC official.
"Actually we want to start the MRT-5 south route before both the already approved MRT-1 and MRT-5 north lines as the procurement complexities have already gripped the projects," he told the FE.
"It will be a test case for us. As long as its procurement will be conducted through international open-tendering method, we will get a competitive cost from the international bidders," the official says.
A senior DMTCL official also confirms that in a major policy shift aimed at decoding the opaque and soaring costs of urban megaprojects, procurement for the MRT 5 south is now a priority.
Officials want to uncover the true market-driven unit costs of building heavy metro infrastructure in Bangladesh, he adds.
The policy shift comes on the heels of major procurement bottlenecks plaguing the JICA-funded MRT Line-1 and MRT Line-5 northern routes.
Highly restrictive bilateral loan conditions mandated that only Japanese consortia could lead the bidding process and limited the competition. But the recent complication is created with the participation of few and limited companies in various contract packages with unusually high quotations.
For instance, a consortium led by a company of Japan quoted Tk 111.78 billion for an underground tunnel package on MRT-5 (north)-a staggering 295-percent higher than the government's official estimate of Tk 37.86 billion.
Collectively, the bids pushed the projected costs of both the JICA-backed lines to nearly Tk 1.84 trillion, more than double their original approved budget.
Based on the quotation, DMTCL revised the cost and estimated MRT Line-1 (Airport-Kamlapur) to nearly Tk 960 billion from the official estimation of Tk 525.61 billion. The cost of the MRT Line-5 north (Hemayetpur-Bhatara) is also likely to double from Tk 412.39 billion in official estimation.
Funded primarily by a $3.0-billion loan from the ADB alongside $1.0 billion from South Korea, the 17.3-kilometer southern line will be executed under an open multilateral funding-agency guideline.
Unlike the JICA-backed lines, any qualified global contractor can bid, ensuring a level playing field.
The gamut over the selection of the contractors for the CPs of MRT 1 and MRT 5 north has intensified as one of the Japanese contractors recently withdrew its participation from a package by showing grounds of a prolonged delay.
DMTCL earlier had sought JICA's concurrence to retender the bid of fat-quoted CPs but was rejected.
For years, analysts have criticized Dhaka's metro-construction costs, which have reached over Tk 36 billion ($300 million) per kilometre-nearly triple the cost of comparable, state-of-the-art underground metro lines built in neighboring India.
kabirhumayan10@gmail.com
smunima@yaho.com