Building Mass Rapid Transit (MRT) line -5 southern metro rail in Dhaka city faces fresh hurdled as co-financer South Korea delays confirming its assured US$1.0-billion loan, throwing the timeline of the $4.9-billion mega-scheme into a pause, officials say.
More than two years ago, the Asian Development Bank (ADB) confirmed the government $3.0 billion worth of financing for the MRT-5 South project as the government completed negotiations with the Asian lender.
Out of the $4.9 billion MRT-5 south project cost, the ADB has confirmed assurances of $3.0 billion in loans and South Korea pledged $1.0 billion, which remained unconfirmed.
Meanwhile, under a strategic policy pivot, the building of Dhaka MRT-5 south route would be expedited to preempt two other lines' projects to set a benchmark for the unit cost of metro-rail infrastructure, the officials said.
However, despite the diplomatic silence from South Korea, the government has decided to push forward with the project.
"Since we have decided to accelerate building the MRT-5 southern route, we requested Korea to finalise its assured loan more than a month ago. But it is yet to reply," said a senior MoRT&B ministry official.
"If Korea does not respond, we have to go searching for the $1.0-billion loan from any other development partners."
When asked, a Planning Commission (PC) official said the scheme was currently being prepared for placement before the next meeting of the Executive Committee of the National Economic Council (ECNEC) for final approval.
A senior Economic Relations Division (ERD) official has said they have no options but to request the lead fund arranger ADB to mobilise one co-financer or more.
"If the silence persists, the government may have to formally approach the ADB to increase its stake, or look to other bilateral development partners to keep the project on track."
The 17.4km MRT-5 (South) line is designed as a crucial east-west corridor aimed at bypassing Dhaka's heavily congested central business districts.
The line will start at Gabtoli and will pass the Technical Junction, Mirpur 1, Mirpur 10, Mirpur 14, Kachukhet, Banani, Gulshan 2, and Notun Bazar, and will end at Dasherkandi.
The metro-rail line will feature both underground and elevated rails, significantly reducing travel times across the crammed capital city once completed.
Following a severe procurement crisis on the Japan International Cooperation Agency (JICA)-funded MRT line-1 and MRT line-5-north projects due to restrictive bidding criteria, the MRT- 5 south project could now help the government understand the contractors' pricing due to scope for open tender, officials said.
The government saw Japanese contractors submit bids ranging from 25 per cent to over 300 per cent above the original estimated cost in the various contract packages of the two JICA-funded projects, they added.
By advancing the southern route through an open and competitive international tendering method, the government intends to bypass single-lender procurement complexities and establish a realistic, market-driven financial baseline for future urban transit lines, civil servants concerned have said.
The project had stalled for long as the previous caretaker government withheld its approval process allegedly for higher cost estimation and shortage of funds in government exchequer.
Dhaka Mass Transit Company Limited (DMTCL) prepared a Development Project Proposal (DPP) on the MRT-5 (south) with a cost of Tk 477.21 billion or US$4.9 billion for getting approval from the ECNEC.
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