Implementation delay to cost Tk 3.03b extra

The government would have to spend 18 per cent extra on the Tk 17.14 billion transmission grid development project due to taking up the project without any prior feasibility study and the delay in its implementation, officials said Saturday.
According to the Power Division officials, the Power Grid Company of Bangladesh Ltd (PGCB) has sought Tk 20.18 billion, higher by Tk 3.03 billion than the original cost of the ongoing Bibiyana-Kaliakoir 400kv and Fenchuganj-Bibiyana 230kv transmission line project.
"After a feasibility study it has been found that the costs in some components of the project have escalated. So, the PGCB needs a higher amount of money and more time for completing the project," a senior Power Division official told the FE.
Another government official said: "The PGCB has undertaken the project without any proper feasibility study. After start of the project, it has conducted the feasibility study. While conducting the study the project design has been changed enhancing the costs in some of its components."
The PGCB said the real length of the grid lines at different stages increased compared to the length estimated earlier in the original Development Project Proposal (DPP) and it pushed up the project cost. So the project cost was revised upward and also the time.
The PGCB claimed that the requirement of funds for paying customs duty and VAT on imported equipment and the cost of land increased in the revised DPP.
Another government official said: "Although the costs in some components have been enhanced, the price of the sub-station, to be procured for the project, has declined. Besides, the PGCB gained Tk 1.54 billion on account of depreciation of the US dollar against the local currency Taka."
"So, it is logical to raise a question about enhancement of the overall project cost by Tk 3.03 billion to Tk 20.18 billion," he told the FE requesting for anonymity.
"The substation price per unit was estimated at Tk 12.58 billion in the original DPP. As per the bidding price, it has now fallen to Tk 11.57 billion. So, a certain portion of funds should remain unspent," the official said.
The PGCB in its original DPP showed that it would improve the 30-kilometre 230kv Aminbazar-Tongi-Kaliakor substation line, the eight-km 132kv Kaliakoir-Dhamrai grid line and the 31.7km 230kv Fenchuganj-Bibiyana grid line.
After the feasibility study the length of the Aminbazar-Tongi-Kaliakoir substation point national grid has been enhanced by six kilometres, the Kaliakoir-Dhamrai grid length by eight kilometres and the Fenchuganj-Bibiyana line by 2.0 kilometres.
Since the PGCB failed to procure necessary equipment in time, the customs duty, VAT and the cost of land increased, the official said.
"We have sent the revised project proposal to the Planning Commission for its approval. We have sought Tk 3.03 billion extra and three more years up to June 2017 for completing the project," said a Power Division official.
The PGCB undertook the project to install the Bibiyana-Kaliakoir 400kv power grid line and the 230kv Fenchuganj-Bibiyana line aiming to evacuate surplus power from the power plants in Sylhet region and develop some other grid lines to supply adequate power to the northern part of Dhaka city.
According to the PGCB, it implemented only 57.75 per cent of the project by December last.