Indian-funded Mongla port dev entails 84pc cost hike

Shipping officials are in a quandary over the Delhi-funded Mongla port-upgrading project as the Indian consultant now seeks a steep 84-percent cost hike from the approved expense, sources said.
They are in doubt whether the project will be financially viable after its completion by spending almost double the actual cost.
The southern seaport-development project consists of construction of container terminal with jetties, container-delivery yard, and service-vessel jetty, procurement of eight vessels, construction of port residential complex, extension of port building with community facilities, mechanical workshop, construction of slipway and marine workshop complex with equipment, construction of rail- crossing and overpass, expansion of roads to six lanes, and construction of multistoried car-parking yard.
India was supposed to provide Tk 44.59 billion under their third Line of Credit (LoC) for the total Tk 60.14-billion-cost project titled 'Upgradation of Mongla Port'.
On the other hand, the government of Bangladesh was scheduled to pay the rest Tk 15.55 billion to implement the project, as approved by the Executive Committee of the National Economic Council (ECNEC) in 2018.
Following constant persuasion, four years after the project got the ECNEC nod, New Delhi selected Egis India Consulting Engineers as Project Management Consultant and the Mongla Port Authority (MPA) signed a deal with the firm in December 2022.
Now the consultant has prepared final drawing, design, and specifications of physical works of the project and made cost estimation in one and a half years of deal-making, which shows cost escalation to Tk 110.91 billion. The hiatus results in hopping 84.40-percent cost hike.
Sources say after the interim government took office, shipping adviser Brigadier- General (retd) M Sakhawat Hussain in mid-September reviewed the progress of development projects under the ministry until this past August.
At the meeting the officials said the project would need cost and time revision as the consultant estimated 84.40-percent cost rise. Moreover, the agreement signed between the consultant and the MPA mentions that the project has to be implemented by only one Engineering, Procurement, and Construction (EPC) contractor.
The higher cost estimation and single EPC contractor-related condition now stood in the way of appointing any other contractors so far for implementation of the main works of the project, they informed the meeting.
They said clipping some components of the project like--construction of container terminal, expansion of main road to six lanes, and construction of multistoried car yard-became high priority.
But, at the same time, "it is also necessary to take into consideration whether implementing the project by raising the cost by 84.40 per cent will be financially viable or not", they said.
Moreover, they suggested inclusion of the provision of appointing more than one EPC contractor for faster implementation of the project.
Sources have said the meeting decided to hold a meeting in presence of representatives of the Indian ExIm Bank, the Indian High Commission in Dhaka, and the consultant for implementation of the project by appointing more contractors.
Contacted Thursday, MPA chairman Rear Admiral Shaheen Rahman told the FE that the project, as such, would be feasible in no way.
"We will make a priority list of components that we need fast," he said.
Mr Rahman said the authority would go forward with the components which are necessary in next two to three years for the seaport, which is expected to become a regional shipping hub with neighbours using it for trade shipments.

[email protected]