Govt counts Tk 5.19b in cost overrun

Cost and time overruns in procurement of 35 ships and ancillary works cost public exchequer a king's ransom -- an additional Tk 5.19 billion -- and the buys still remained unfinished.
Sources said Thursday the scheduled time was four years and the approved cost Tk 13.19 billion. But, apart from the extra spending, the shipping authorities need three and a half years of extra time,
Unable to complete the procurement and entire project works, the Bangladesh Inland Water Transport Authority (BIWTA) sought 39-percent higher funds and one more year, government officials said.
The government recently revised the project a second time allowing the BIWTA to complete the process by December 2025 -- "on a note of warning against seeking anymore extension or revision", they said.
The state-owned water transport provider in 2018 took over the 'Procurement of 35 commercial ships and eight supportive water vessels, and building two slipways project' involving a cost of Tk 13.19 billion. The project is meant to improve its passenger and commercial fleets.
Now the cost has escalated to Tk 18.37 billion in a rise of over 37 per cent from the original cost estimation made in 2018.
"Absence of feasibility study and faulty cost estimation of the ships by the BIWTA are the key reasons for the revision of the project," a senior Shipping Ministry official told the FE, requesting anonymity.
Earlier, the BIWTA had prepared a 'perceptional design' of the commercial ships and estimated their costs without consulting the International Classification Society, he added.
"When it consulted the Classification Society, the structural design of the ships had been changed and, similarly, their cost estimations, too," the ministry official said.
"Due to changes made to design, devaluation of taka against the USD and some changes in the work plan of the slipways have forced us to revise the project for a second time," said a BIWTA official, who also preferred not to be quoted by name.
He said almost maximum works under the project had been completed. "Now we need more time and funds to complete the works."
An official at the Planning Commission says: "We have already extended project-execution deadline twice over and revised the cost once. But the BIWTA has failed. Now they have sought another revision and extension of funds and execution timeline."
Back in 2018, the Executive Committee of the National Economic Council (ECNEC) approved the project involving Tk 13.19 billion for completion by June 2022.
Failing the timeline, the BIWTA had the cost revised to Tk 13.18 billion and the deadline extended by one more year to June 2023.
But the state water-transport authority lagged once again. As such, the government extended the project-implementation period for one and a half years more up to December 2024.
Assuming failure within the fresh deadline, the BIWTA recently sought revision of the project for a second time by increasing the cost and time up to December 2025.
"Usually, construction of roads, bridges takes extra time due to land acquisition and some other complex processes in government system. But it is unfortunate that ship procurement is taking seven and a half years. Then how the project will be viable!" exclaims a PC Member.
He says the procrastination has not only caused cost overrun but the people are not getting services from the BIWTA from its 35 commercial ships being procured under the project.

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