Still awaiting approval, BTCL’s telecom project cost triples in 2 years

A project of the Bangladesh Telecommunications Company Ltd (BTCL) – focused on making high speed, reliable telecom and internet services available across the country–is yet to get approval, but the proposed cost has already jumped nearly 3.5 times the original budget.

The Posts and Telecommunications Division sent a project proposal to the Planning Commission for approval in 2018, titled "Development of BTCL's Existing Optical Fibre Cable Network and Conversion to Ring-type Network," with a proposed cost ofTk368.4 crore.

The Planning Commission returned the proposal to the division, saying that many other government divisions are already working on the same matters under various other projects. The commission also asked the division to justify this new project.

The Posts and Telecommunications Division recently sent a restructured project proposal to the commission, with a certificate stating that the new proposal has no "duality" with any other projects. 

It also increased the proposed cost by Tk896.74 crore to Tk1,265.14 crore, within a span of less than two years.

Terming the proposed cost of the restructured project proposal as "unjustified," Planning Commission officials told The Business Standard that the cost of a project could go up as time passes, and a cost increase is logical when the scope of work increases too.

But, in this case, the commission will ask the BTCL to explain what changes had occurred in the scope of this project within this small amount of time, they added.

Responding to a query, BTCL officials said additional funds are needed to ensure a bandwidth of 100Gbps in the upazila and 300Gbps at the district levels, and to upgrade from the existing 2.5Gbps bandwidth.

Meanwhile, Posts and Telecommunications Division officials said the proposed project's costs increased because the rate schedule changed with the passage of time.

According to the project proposal, the BTCL is currently providing internet and telecom services to 472 upazilas and 1,216 unions across the country through 23,000 kilometres of optical fibre. But due to a lack of network redundancy, it has been unable to provide quality service.

Besides, when the BTCL and Power Grid Company of Bangladesh's (PGCB) fibre optic cable line from Tangail to Sirajganj suffers any issues, it severs telephone and internet lines from Dhaka to Khulna, Rajshahi, Barishal and Rangpur.

Even Dhaka's internet and telephone lines to important regions such as Mymensingh, Sylhet and Chattogram depend on a single fibre optic cable line for each of these regions.

The new project – which will introduce aring type network topology – was proposed in a bid to cut dependency on lone fibre optic lines to provide reliable telephone and internet services.

Under the project, fibre optic clusters will be installed in eight regions of the country to allow direct connections to Dhaka. Every cluster will be connected to one or more other clusters, which will prevent disconnection in any region even after one fibre optic line gets disconnected.

The Project Evaluation Committee (PEC) had scheduled a meeting to discuss the restructured project proposal, but the meeting is yet to take place. The working paper revealed inconsistencies regarding additional costs in the restructured project proposal.

Any state-owned company must take a clearance certificate from the Finance Division's Monitoring Cell before taking up a project, but no such step has been taken in this instance.

Besides, for such projects, the government is supposed to provide around 33-40 percent of the fund as equity. But the project seeks 100 percent of the fund as equity from the government.

It is mandatory to conduct feasibility studies for projects costing Tk25 crore or more, but the BTCL's project proposal contains no data besides the required type of equipment, their quantity and locations.

Under the proposed project, Tk226.27 crore has been earmarked as administrative and other costs, but no breakdown of the expenditure has been provided. A proposed cost of Tk873 crore has been set for two packages under the project, but no purchase plan has been provided for Tk392 crore.

Speaking to The Business Standard, a high official at the Planning Commission who is involved with the evaluation of the project, said, "A project's proposed cost increasing more than three times compared to the original budget in a span of less than two years is unjustified.

"We have also found several other inconsistencies. We will seek explanations regarding such issues from officials involved with the proposed project. "

Meanwhile, BTCL's Deputy Managing Director (Planning & Development) AKM Habibur Rahman said the project's scope has got bigger, which was why  the proposed costs have gone up too.

He added, "The project proposal has been restructured considering the competition arising from the expansion of the 4G mobile network, launching of the 5G network and demand for data for up to 2030.

"Currently, most of the districts and upazilas throughout the country have 2.5Gbps internet connection. Even after completion of several existing projects to launch 10Gbps internet connections at the district level, internet connections in 13 of the districts will remain at 2.5Gbps bandwidth."

Habibur Rahman continued, "Under the proposed project, we will be able to provide at least 300Gbps internet connection in every district of the country. We will also be able to ensure at least 100Gbps bandwidth at the upazila level.

"Every ISP (internet service provider) and IIG (international internet gateways) in the district and upazila levels will get 10Gbps each."

Spelling out more details, he said, "As part of the project, connections ranging from 600Gbps to 1Tbps will be installed between Dhaka and the eight clusters across the country.

"To ensure redundancy, 500Gbps lines will be installed from Sylhet to Mymensingh, Mymensingh to Rangpur, Rangpur to Bogura, Bogura to Khulna and Khulna to Barishal."

Habibur added that the proposed costs have gone up because the BTCL plans to install connections with a large bandwidth.

Commenting on the matter, Posts and Telecommunications Division Joint Chief Md Musleh Uddin said, "The first proposal was prepared in 2015, while the restructured proposal was prepared this year.

"The proposed cost has increased due to a change in rate schedule in the last five years. Besides, the authorities concerned have set Tk500 as damages for installing fibre optic cables under per metre of the road, which also contributes to the cost increase.

As per the restructured project proposal, a cost of Tk174.65 crore has been proposed for installing 3,493 kilometres of optical fibre under the ground.

Thus the proposed cost is Tk5 lakh for installing every kilometre of optical fibre, and a similar amount of money has been earmarked to pay damages for roads being dug up.

Tk37.50 crore has been proposed for installing 25 kilometres of cables under rivers. So, the cost per kilometre will be Tk1.5 crore.

According to the restructured project proposal, the BTCL will need Tk386.8 crore to install optical fibre cables and pay damages, which exceeds the proposed total cost of the previous proposal.