2 Chinese Projects: PMO asks rail ministry to cut costs

The Prime Minister’s Office has directed the railways ministry to significantly reduce the cost of China-funded Akhaura-Sylhet and Joydebpur-Ishwardi rail line expansion projects.

The PMO issued the directives following a report of a special committee formed to review costs of three projects and to assess whether the projects should go ahead as planned.

As per the directives, railways have to reduce Tk 3,354.31 crore cost from the project for converting metre-gauge rail line to dual-gauge line between Akhaura and Sylhet, which is 20.8 percent of the total project cost.

For upgrading the Joydebpur-Ishwardi dual-gauge line to dual-gauge double line, Tk 1,495.52 crore cost has to be slashed. The amount is 12.91 percent of the total project cost.

Such directives from the PMO is “not only rare, but I think this is the first”, a railway official said.

Officials said the PMO sent the directives to the railways ministry last week but they are yet to reach Bangladesh Railway, the implementing agency of the projects.

“The ministry has received the directives but we are yet to get it,” Md Shamsuzzaman, director general of BR, told The Daily Star yesterday.

The Daily Star could not ascertain whether the directives asked the cost to be cut from different parts of the projects or by changing their plans. It also could not be determined what directive was issued for the Joydebpur-Mymensingh-Jamalpur dual-gauge double line project.

On September 30, the PMO formed the committee to review the three railway project costs and whether they should go ahead as planned. The projects were supposed to be implemented with Chinese finance and by Chinese companies.

The committee, led by Shamima Nargis, the then member (physical infrastructure division) of the Planning Commission, submitted its reports within seven working days, sources said.

Following the submission, Prime Minister Sheikh Hasina issued the directives, the sources added.

The committee had representatives from the railways ministry, Bangladesh Railway, Economic Relations Division (ERD), and Implementation Monitoring and Evaluation Division (IMED).

The committee also gave several observations and suggestions and the PMO asked for necessary changes in the projects following them, they added.

Of the three projects, Executive Committee of the National Economic Council (Ecnec) has approved the first two projects and Chinese companies have been selected and contract costs have also been negotiated.

Final loan and commercial deals were yet to be signed.

The third project has not been approved by Ecnec yet.

However, a Chinese company has already been selected and a tentative contract cost has been negotiated.

The Ecnec in April last year approved the project to convert the Akhaura-Sylhet metre-gauge rail line to dual-gauge for Tk 16,104 crore.

The contract cost negotiated with China Railway Construction Bridge Engineering Bureau Group Co Ltd is Tk 12,079 crore.

But many questioned the “huge cost” while others asked as to why the government would convert the existing line when it was possible to build a new dual-gauge lines with some extra money.

The government took up the Tk 14,250 crore project in January last year to turn Joydebpur-Ishwardi line into a dual-gauge double line. It is scheduled to be completed by December, 2024.

The negotiated contract cost for this project is Tk 9,839 crore and the selected company is China Civil Engineering Construction Corporation.

The tentative negotiated cost for constructing the dual-gauge double line alongside the existing Joydebpur-Mymensingh-Jamalpur metre-gauge section is Tk 8,808 crore and the selected company is China Railway International Group.

The Daily Star failed to reach the railways minister and secretary for comments despite repeated attempts.


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