How BRT delay is costing $123m a year in lost benefits

A bus rapid transit (BRT) corridor takes three years to open to traffic in Asian countries and Bangladesh's first such project was scheduled for completion in four years from 2012.

Eleven years on, the work on the 20.5km BRT between Dhaka airport and Joydebpur of Gazipur is still going on, with the project cost shooting up to Tk4,268 crore from the original Tk2,040 crore.

Infographic: TBS

Now, what is the cost of lost benefits from the high-speed bus corridor project due to the delays?

It is astounding, says the Asian Development Bank, the funding agency of the project.

It explains if the country's first BRT had been completed in 2016 as per original schedule, it would have generated economic benefits of around $123 million, equivalent to around Tk1,140 crore, per year, from the following year by saving time and money spent on the road as well as costs of traffic disruption and environmental damage.

The project is now scheduled for completion in 2024. The eight years' delay would put the lost economic benefits to nearly a billion dollars, enough for constructing two such BRT corridors even if the escalated project cost is taken into account.

The project, designed for a faster transportation between the capital and the industrial town, has instead added to the time and cost for commuters and businesses for its haphazard construction works narrowing the road space and polluting the environment.

Experts say the economic losses resulting from the delay in construction would be even greater when taking into account the disruption of goods transportation within the industries located in Gazipur and the daily suffering endured by people and businesses.

They blamed it on inadequate feasibility studies, flawed design, challenges in relocating utilities and acquiring land, contractors' reluctance to provide construction materials, and negligence on the part of implementing agencies.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, told The Business Standard, "When considering the delayed benefits, the actual cost of project procrastination becomes significantly higher."

He emphasised that Gazipur, being an industrial area, experiences a high pressure on the roads for the transportation of raw materials and finished products. As one of the transportation corridors from Dhaka to the northern districts, the pressure of passengers is also high in this part.

"With the ongoing construction work on the road extending over several years, the suffering of people continues to increase, along with production challenges in the industrial sector," he said.

The eminent economist added that recovering the financial value of such losses becomes exceedingly difficult.

How it's done in other countries

The Bangladesh Bridge Authority, the Roads and Highways Department, and the Local Government Engineering Department have been jointly implementing the BRT project since 2012.

Let's look at the average time taken to complete BRT projects in some other countries.

Jakarta, the capital of Indonesia, inaugurated Southeast Asia's first BRT system in January 2004. The construction was completed within a remarkably short span of just six months.

Subsequently, Indonesia went on to launch an additional six BRT systems, each introduced approximately one year apart.

Within a few years, the country successfully constructed the largest BRT corridor, consisting of a network of 13 lines.

In Yichang city in Hubei province, China, the construction of a 23.9km BRT line commenced in 2013 and concluded in July 2015. Originally projected to cost $515 million, the project was completed three years ahead of schedule, resulting in a significant cost reduction to $361.20 million.

The average time for completing a BRT in India and Pakistan is much lower, too. 

India's first 12km BRT line was completed in three years in 2009 in Ahmedabad; the city built an 89km network in the next six years. Indian capital Delhi constructed its first BRT in two years in 2008 and expanded the network to 115km in the next two years.

Pakistan took even a shorter time, opening a 27km BRT to traffic in Lahore in 2013, within a year since the project work started.

ADB analysis

In a recent assessment conducted by the Asian Development Bank (ADB) as part of additional financing for the project, it was revealed that if the Bus Rapid Transit (BRT) system had been launched on time, it would have generated annual economic benefits of $105.5 million across various sectors.

However, due to the delay in construction work, the cost of traffic disruptions amounts to $17.52 million annually, as per the ADB.

The ADB's Economic and Financial Analysis of the project stated that prior to the project's initiation, vehicles on the corridor were only able to travel at speeds of 8-12km per hour. 

It would have taken two to three hours to travel from the Airport to Joydebpur using conventional transportation. The aim of the project was to significantly reduce this travel time to 35-40 minutes through the implementation of the BRT system.

ADB estimates that this would save at least $20.1 million annually in value of time (VOT).

The introduction of the BRT service would have resulted in a decrease in the number of private cars and city buses, leading to annual savings of $20.1 million in vehicle operating costs (VOC).

The ADB also estimates that with the implementation of the improved BRT system, accidents would have been reduced, resulting in economic benefits of at least $6.3 million annually. Additionally, a reduction in environmental damage would have led to savings of $2 million.

In addition to launching the two-lane BRT services, the project encompasses the development of public transport lanes, construction of footpaths, and the creation of dedicated lanes for non-motorised transports.

However, the completion of these tasks in time would have brought the corridor development benefits of $57 million in the first year and $59 million in the subsequent year.

Current situation

During a recent visit to the construction site of the BRT project, which spans from Dhaka airport to Joydebpur, it was observed that construction materials for the project were scattered across various sections of the main road. As a result, passengers and goods are being transported with risks posed by the uneven and damaged road conditions.

According to the Dhaka BRT Company, the entity responsible for managing the BRT system, approximately 15 lakh people rely on public and private transportation in this area every day.

Local entrepreneurs have expressed their concerns about the construction delays, highlighting the increased suffering and rising business costs as a consequence.

Shovon Islam, managing director at Sparrow Group, a prominent garment manufacturer and exporter, shared his experience, stating, "I have to travel on this road every day to reach my garment factories in Gazipur and Bhaluka, Mymensingh. It takes two and a half hours to travel from Dhaka to the factory by road. If there is heavy traffic, it takes even longer."

He further mentioned that due to traffic congestion, they have to transport foreign buyers to the factory via helicopters multiple times a week, resulting in additional expenses.

According to the Implementation Monitoring and Evaluation Division (IMED) of the planning ministry, two different Chinese contractors were awarded contracts for significant portions of the project. 

Notably, one contractor secured the contract at a price 6.52% lower than the quoted amount, while the other contractor secured it at a price 27.39% below the quoted price.

However, these contractors did not fulfil the manpower, financial, and material requirements as specified in the contract, likely due to profitability concerns, according to an IMED report of last fiscal year. 

As a result, both contractors have made significant delays, surpassing 2,000 days beyond the agreed-upon completion timeframe of 917 days for their respective packages.

When contacted, Shafiqul Islam, the managing director of Dhaka BRT Company, said the project faced delays due to various challenges, resulting in increased costs. However, after the end of all the complications, the implementation of the project has begun to gain pace.

The contractors are being pressured to expedite the work, aiming to launch the BRT service in September this year, he added.  

The MD mentioned that the evaluation process for the procurement of 137 buses to initiate the BRT service has been completed. Upon receiving final approval from higher authorities, the buses will be available by August.

Dr Shamsul Haque, director of the Accident Research Institute of Buet, has attributed the ongoing issues in the implementation of the BRT project to a lack of understanding about public transport among those involved.

He said, "When consultants and contractors perceive a lack of oversight from the implementing agency, they tend to delay the work."

"If there were a culture of accountability in place, appropriate punishment could have been ensured for those responsible," he added