The government will have to spend three-and-a-half-time more on a key project for Dhaka Water Supply and Sewerage Authority's (DWASA) failure to implement it on time, insiders said on Friday.
Even after 10 years, DWASA failed to make any headway with the Saidabad Water Treatment Plant Project Phase-III, which has forced the interim government to extend its deadline for another four years and approve a 248 per cent cost increase, they said.
Meanwhile, people have not only been deprived of drinking water supply from surface sources but are also bearing the burden of the costly loans taken from foreign lenders to finance the project, project officials said.
The long delay and massive implementation failure have caused the project cost to go up by Tk 114.17 billion to Tk 160.15 billion from the original estimation of only Tk 45.97 billion, Planning Commission officials said.
DWASA undertook the project in July 2015 at a cost of Tk 45.97 billion with a target to complete it by June 2020.
French Development Agency (AFD), the European Investment Bank (EIB), and Germany's KfW confirmed bankrolling the project in 2015.
Having failed to start the physical work by June 2020, DWASA sought the project's first revision, raising the cost to Tk 77.14 billion, a 68 per cent rise from the original estimation. It also sought five more years up to June 2025 to complete the project.
The then government revised the project accordingly in 2020. But DWASA again failed to finish the project and sought a second revision, raising the cost to Tk 160.15 billion and extending the deadline for four more years up to June 2029.
The Executive Committee of the National Economic Council (ECNEC) recently approved the second revision proposal considering the necessity of the project, which would ensure the use of surface water.
The top responsible DWASA officials were not available for comments on the reasons behind the project's delay.
However, a senior DWASA official requesting anonymity told The Financial Express they had some complexities with a development partner regarding the confirmation of its assured funds at the initial stage of the project.
The problem has been overcome and project work has started, he added.
The official also said they were forced to revise the project for the initial delay in execution.
Nearly five years were lost at the initial stage for the delay in fund confirmation, he added.
A Planning Commission member said, "It is a big problem of many government agencies. They undertake projects without the confirmation of foreign assistance. It ultimately affects the implementation of those projects."
There is a clear guideline that no project will be approved before the
confirmation of funds. Fund confirmation is mandatory for project approval, he added.
"But the public bodies sometimes give us so much pressure that we are forced to endorse their schemes only by verifying fund assurance documents."
The main purpose of the project is to set up a treatment plant with a capacity of 450 million litres per day (MLD) and a sludge treatment plant beside the Meghna River to supply drinking water to Dhaka city.
According to DWASA, AFD assured of providing $129.74 million, EIB $85.74 million (76 million euros), and KfW 90 million euros to set up the treatment plant.
When asked about the delay, a DWASA official said complexities arose when EIB expressed its inability to provide the entire assured fund of 76 million euros due to the currency's devaluation against USD.
In February 2016, EIB informed DWASA that it would provide only half of the assured funds, he also said.
The Economic Relations Division (ERD) then requested KfW to fund the project as the co-financier instead of EIB. The German institution agreed to provide 90 million euros in December 2016.
"Since we lost the initial five years and now another five years for several complexities, we need four more years. Besides, the prices of construction materials and machinery were estimated 10 years ago. Now their prices have increased. So, we need more funds to complete the project," the DWASA official said.
Once completed, the total capacity of the three water treatment plants, including the existing Saidabad phase-I and phase-II, will be 900 MLD.
With a capacity of 225 MLD, phase-I was constructed in 2002 under the Fourth Dhaka Water Supply Project financed by the World Bank, as well as the governments of Bangladesh and France.
Phase-II, having a capacity of 225 MLD, was built in 2012 by Danish and French companies.
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