Govt to bear construction cost as talks for Chinese funds fail

Dhaka-Sylhet highway has to be upgraded to a four-lane one with government's own funds as over a yearlong negotiation with a Chinese company failed, sources said.
The Ministry of Road Transport and Bridges (MoRTB) has now decided in principle to implement this mega construction project with funds from the exchequer.
The sources said Roads and Highways Department (RHD) sat with China Harbor Engineering Company Limited (CHEC) several times since the signing of a memorandum of understanding (MoU) on October 9, 2016 but failed to convince the firm to downsize its commercial proposal.
In the meantime, the Ministry has verbally informed the Chinese company of its inability to accept the commercial proposal with the costing staggering around Tk 170 billion for constructing the 226- kilometre highway into a four-lane road under government-to-government (G2G) arrangement.
Officials said following the decision the ministry has made a move for land acquisition after revising the development-project proposal in connection with the project funding.
The proposed rate of the Chinese company was almost double the cost the RHD estimated after a feasibility study and detailed design work with the support of consultants from the Asian Development Bank (ADB).
RHD signed the MoU with the Chinese company with the condition of fixing its proposed price after negotiations, as RHD's cost was rated with its 2014 rate of schedule and during the project's design stage.
The officials said after rescheduling the cost with RHD's 2015 latest rate of schedule, it could not reach the rate of Chinese company's proposal.
Following the signing of the MoU with CHEC, RHD recast the cost of civil works on 226 kms to Tk 126.65 billion after rescheduling with its 2015 rate. The cost of the project was estimated at Tk 91.84 billion during the feasibility study and detailed designing work.
After feasibility study and detailed design, RHD estimated the cost of 286-km Dhaka-Sylhet Highway up to Tamabil to establish regional corridor with the Indian State of Meghalaya.
The Department, however, said the cost of the four-lane project was estimated with almost total restructuring of the existing two-lane road, having 7.2-metre width on each side and 3.6km space for slow movement of vehicular traffic.
This was one of the potential projects of the ADB. However, the Bank dropped the project from its 2018 pipeline due to the signing of the MoU with the Chinese company.
Sources said as the government has already lost one year on negotiations and there is no scope to wait for funds from other development partners, the decision was taken to go for executing the project with government funds.
smunima@yahoo.com