PC extends 116 projects without cost increase

The planning commission has approved time extension of 116 projects without increasing costs in the first seven months of the current fiscal year.
Around 50 others of such proposals are in wait for recommendation by the Implementation Monitoring and Evaluation Division (IMED), said officials concerned of the commission and the IMED.
Earlier, planning ministry received proposals for time extension for 142 schemes.
In February, multiple ministries and divisions submitted over 50 new proposals to the Planning Commission and the IMED in addition to the six pending cases, according to Commission officials.
Experts and economists said the provision of "extending period without an increase in cost" is often abused as a tactic to keep projects under the Annual Development Programme (ADP) stalled for years.
They point out that many such projects are already over-estimated, allowing for extension without requiring immediate cost escalations.
However, after multiple extensions, costs often rise because of factors like higher material prices, updated rate of schedules, increased land value, contractor compensation and devaluation of taka.
"Even when project authorities seek an 'extension of period without an increase in cost, approving such requests often leads to eventual cost escalations," said Dr Zahid Hossain, former lead economist at the World Bank's Dhaka office.
Such proposals, according to him, often serve to legitimise inefficiencies in project implementation.
Dr Hossain highlighted the need for thorough scrutiny and an assessment of how frequently similar extensions have been granted for the same project.
The review found that the Chittagong City Outer Ring Road project, approved in 2011 at Tk 8.56 billion and with a target of completion by 2014, underwent multiple extensions.
Initially, its duration was extended to 2016 through two amendments. Subsequently, two more extensions were granted without increasing costs.
Through a third revision, the deadline was pushed to 2021, followed by another extension to 2022 without additional funding.
Although the fourth amendment extended the deadline to 2023, a proposal was later made for another extension involving a higher cost.
As a result, the originally four-year project stretched to 13 years, with four cost-neutral extensions along the way. Meanwhile, the total project cost surged nearly fourfold, rising by Tk 24.68 billion to reach Tk 33.24 billion.
The Road Transport and Highways Division recently sent a proposal to extend tenure for the greater Dhaka sustainable urban transport project, known as BRT Gazipur Airport, for another year up to December.
The project, initiated in 2012 for completion in 2015, witnessed multiple extensions and a target cost hike by 109 per cent, despite dropping some components from the project.
The Executive Committee of the National Economic Council (ECNEC) has recently approved the extension of six infrastructure projects without increasing costs.
These projects have already undergone at least four no-cost extensions under a phased approval process involving the implementing agency, relevant ministry, Planning Commission and the ECNEC.
The long-pending projects include the construction of Goma Bridge, Rajapur Bridge and a 7.5-kilometre connecting road, as well as the widening of key highways in Barishal, Bhola and Laxmipur.
Other projects involve building a circuit house in Kushtia and upgrading highways in Bhuapur-Tarakanda and Bairagipul-Tumchar-Baufal areas.
The initial estimated cost of these projects was Tk 13.57 billion, but expenditure has already risen to Tk 13.76 billion with an average implementation rate of 79.32 per cent.
Revenue expenditure for salaries and wages of officials and employees are involved in these projects, with significant amounts spent on allowances such as house rent, entertainment, medical, transportation and mobile bills, along with ancillary costs like telephone bills, vehicle maintenance and fuel.
However, Dr Hossain posed a question, saying: "If project timelines are extended without revising costs, how are the above expenses met?"

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