Hemayetpur-Bhatara metro rail cost set to rise 11% before construction starts

Delays in detailed design, land acquisition and procurement of contractors are pushing up the cost of Hemayetpur-Bhatara metro rail by 11.19% even before the construction starts.

The progress of detailed design, which was scheduled to be finished in October, has so far been only 24%, and the Dhaka Mass Transit Company Limited (DMTCL) now wants to complete the work by February 2023.

Although the land acquisition is supposed to be finished by January 2023, the state-owned implementing agency of the Dhaka Metro Rail is now seeking till December 2024 for the work.

The procurement of contractors is scheduled to be done by November 2023, but the DMTCL now wants to complete the work two years later in August 2025, citing disruption by the Covid pandemic.

The Executive Committee of the National Economic Council (Ecnec) approved the MRT Line-5 (Northern Route) project in 2019 as the third metro rail aiming to start passenger transport in 2028 but the construction has not started in the last two years.

As all the preliminary preparations are falling behind, there is no possibility of starting the construction of the project, which is aimed at serving more than 14 lakh passengers per day, before 2023.

The Japan International Cooperation Agency (Jica) has expressed these fears after a 15-day series of meetings aimed at concluding a loan agreement for the second phase of the project.

According to sources in Jica, the cost of construction of the 20-kilometre railway line will increase to 605,250 million yen, equivalent to around Tk45,852 crore. Initially, the project cost was estimated at around Tk41,239 crore. It means the cost is set to increase Tk4,614 crore.

The minutes of the series meetings of the Jica mission with the officials of the Economic Relations Division (ERD), Road Transport and Highways Division, and the DMTCL revealed that the cost would go up due to an increase in the cost of land acquisition, recent economic situation, updating of the construction schedules and change in the exchange rate.

The DMTCL blamed the delay in recruiting consultants owing to the adverse impact of Covid-19 behind the slower progress of the project.

Jica officials found serious lags in the employment of officials for the project implementation unit and stressed employing some major positions immediately. They also stressed finding the solution for some controversial issues.

The mission agreed to finance 175,712 million Japanese Yen, which is equivalent to Tk13,311.5 crore, as the second tranche to cover the fund required for the project till December 2025.

Why the project

The population of Dhaka has grown rapidly from 6.6m in 1990 to 19.84 million in 2018. The number of registered vehicles surged from 20,600 in 2010 to 1,370,500 in 2018, leading to significant traffic congestion coupled with the limited road density in Dhaka.

This has inflicted additional costs for the maintenance of the vehicles, opportunity cost during lost travel time, and other economic loss from these traffic congestions, which are estimated to reach $3.8 billion per year.

To counter the increasing problems of urban transportation and its environment, the government initiated five MRT lines to reduce traffic congestion in Dhaka.

MRT Line 5 (North) is one of the priority projects among five lines while more than 14.78 lakh of passengers would be benefited from the line daily.

The line would help commuters travel 20km from Hemayetpur, the western side of the capital, to Bhatara, the eastern side, by only 32 minutes. The line would help to reduce journey time by 74%, 90 minutes for each passenger.

Delay in the recruitment of staff

The Jica mission expressed serious concern about a significant delay in staff employment. Only 13 out of 82 key positions of additional project directors, deputy project directors, assistant project directors, and assistant engineers have been fulfilled so far, which was supposed to be achieved by June 2020.

The DMTCL explained that the reason for the delay is mainly due to Covid-19, and said the employment of three additional project directors and 14 deputy project directors will be finished by March and June 2022, respectively.

The completion of employment of all of the officers and staffers shall be done prior to the commencement of construction in June 2023, committed DMTCL officials.

Jica seeks the safety of land in the underground section

The Jica mission stressed the addition of a chapter to the Metro Rail Act to ensure the safety of the land above the underground section of the project in order to protect the underground structure from any hampering structures from the above.

The DMTCL committed to taking necessary coordination to enact the legislation of the surface rights through amendment of the Metro Rail Act. The DMTCL will start preparation for the amendment of the Metro Rail Act to be done before the commencement.

Cantonment's NOC for alignment

Jica officials stressed accelerating the process of a no-objection certificate (NOC) from the Dhaka Cantonment because the project passes through the underground of the cantonment directly.

The DMTCL explained that the NOC for the project was already issued in April 2018 with 13 conditions. The DMTCL will sign the memorandum of understanding (MOU) by June 2022 before the commencement of construction after satisfying the 13 conditions.

Strong concern about security

The Jica mission has expressed strong concern about the security situation in Bangladesh after the incident at Dhaka's Holy Artisan Bakery in 2016 and strongly requested the authorities to take the highest standards of security measures to ensure the safety of the Japanese companies.

The Jica mission emphasised that given the damages by the attack to the consultants concerned for the preparatory survey of the project, the project requires special considerations to the security arrangements.

The DMTCL explained that two platoons are necessary for 24 hours protection of the consultant office, and the Jica mission has suggested another platoon for the consultant team's site visit.

DMTCL explains recruitment delays, cost escalation

MAN Siddique, managing director at the DMTCL, told The Business Standard that there are some problems from the government side in employing officials to senior positions.

He said the DMTCL has provided a timeline and the recruitment is expected to be completed accordingly.

Responding to a question regarding price escalation, he said the overall cost may come down if the exchange rate falls in the future.

He said currently, some preparatory work is lagging behind the targets due to the adverse impacts of the pandemic but the speed has already accelerated in recent times.

MAN Siddique said the DMTCL has a plan to overcome the lackings through extra working hours and commence the civil work by January 2023.

Expert for hiring skilled people

Transport and communication expert Dr Shamsul Hoque, professor at the civil engineering department of the Bangladesh University of Engineering and Technology (Buet), blamed a lack of skilled manpower behind the slower progress of the project.

He said the government is highly dependent on consultants and contractors to implement mega infrastructure projects.

As business entities, consultants and contractors always try to reduce the speed of any project in order to take financial advantage through overrunning the cost, Professor Hoque urged the government to recruit skilled human resources to accelerate the project.

"MRTs are highly cost-oriented projects in Bangladesh. The operation and maintenance cost of such services is also high. Cost escalation of MRT project would increase the cost of services for people or increase the subsidy from the government," he said further.