Delays, cost overruns dog railway projects for decade

Cost escalation and time extension have become commonplace for many government projects because of their slow-moving implementation process. When it comes to Bangladesh railway, some of its projects appear to run at an impossibly slow pace, triggering cost hikes up to an unprecedented 873% in some cases.  

For example, a six-year project to procure 70 metre gauge diesel electric locomotives has not been completed even after a decade. 

Starting in 2011, the project has made a 0.5% progress despite three time extensions and its cost has gone up to Tk2,659 crore from the initial Tk1,946 crore over the years.

Yet, the railway authorities are not sure when the project will end.

Likewise, there are three more ongoing railway projects that have been running at a snail's pace for a decade, leading to multiple time extensions and cost hikes with questionable progress.

The authorities have mainly blamed such delays to changes in designs and sources and types of financing in the middle of the projects, and delay in releasing funds. 

Besides, project implementers face different types of hurdles with most projects taken without a feasibility study and future projection, they point out. 

To top it all, then came the pandemic onslaught that further slowed down the projects, they add.

There are 41 ongoing railway projects involving Tk1.42 lakh crore, of which at least 20 saw their deadlines get extended one to four times and costs went up massively. 

The projects were taken up as per the railway's first master plan approved in 2013 to increase train services and expand its network for a strong and integrated transport system in the country. 

As per the phase-wise vision of the master plan, the railway is supposed to have 346 locomotives and 1,832 coaches by the 2019-2023 period. But at present, the service provider only has 249 locomotives and 1671 coaches in its system, says its latest annual report. 

According to Bangladesh Railway, the procurement of 70 metre gauge diesel electric locomotives project started in July 2011 with a six-year tenure until June 2017. The project cost was estimated at Tk1,946 crore. 

For the procurement, the railway authorities floated tenders inviting bidders three times from 2011 to 2014 but it went nowhere as there were no bidders.  

In 2018, a contract was signed with Hyundai Rotem, a South Korean company, to procure the locomotives at a cost of Tk2,035 crore, and Standard Chartered Bank and Japan's Sumitomo Mitsui Banking Corporation were set to finance the procurement. 

But the Economic Relations Division (ERD) disagreed on taking the loan, marking it a hard loan as its interest rate was above 15%. So the loan agreement did not progress any further.

Even then, the planning ministry extended the project implementation period three times to 2024. 

Ahmed Mahbub Chowdhury, project director of the Procurement of 70 Metre Gauge Diesel Electric Locomotives, told The Business Standard, "The project has not made any progress owing to complexities relating to financing. The Finance Division has continued to press for soft loans, which are hardly available."

Generally, the authorities arrange funding before a tender is floated in most cases, but that did not happen in this project, he said. 

Had the Finance Division either pushed for a soft loan beforehand or arranged for the fund in time, the project would not have been delayed for such a long time, the project director added. 

Extended deadline ends yet project incomplete 

The nearly 65-kilometre Khulna-Mongla port rail line is another vivid example of a very slow-running railway project.  

The project, which was taken up in December 2010, was supposed to be completed within the next three years around June 2014. But it has been lingering for more than a decade and has got an extension for another one and a half years. 

The project's time has been extended four times and its cost has increased by around 121% to Tk3,801 crore from the initial cost of Tk1,721crore. 

From then on to June 2021, the progress of the project has been 84%. Now it is expected that the project will be completed by December 2022. 

Project director Md Arifuzzaman said, "The pandemic is one of a few reasons for the delay. We are now working on completing the project by December 2022." 

Dohazari-Cox's Bazar project: Another case of delay

To give easy and affordable rail connectivity to the tourist city and establish a connection with the Trans-Asian railway corridor, the government took up the project in 2010 with a target of June 2016 completion. 

This project also got its time extended several times and the completion deadline was finally set for June 2022. 

After ten years, the project has witnessed an overall 64% progress till October this year to meet the revised target of commissioning by December next year.

Talking about the delay, project officials said the project was taken up to set up a 128km metre-gauge rail track. But three years later, the authorities changed the decision and decided to set up a dual-gauge rail track, which required more land acquisition and increased cost. 

The project's design has also been changed. Thus the project cost jumped around tenfold to Tk18,034.47 crore from the initial cost of Tk1,852.35 crore.

Faulty design delays Kulaura-Shahbazpur section of railway 

To increase transportation of goods and boost regional trade between India and Bangladesh, the government took up the Kulaura-Shahbazpur railway reconstruction project in 2010. The project was scheduled to be completed by June 2017. 

After 10 years, around 70% of project work is still to be done even after several extensions of the deadline.  

The target has now been set at finishing the 52.54km railway line by 2022 but there has been little progress over the last six months. 

With work progressing at a snail's pace, concerns have been raised over completing it even in the extended period.

Project director Md Sultan Ali blamed the change in the project design and a delay in financial approval for the delay. 

Initially, a metre gauge line was planned for the project, but later the design was changed following the instructions from the prime minister who directed that all newly-constructed railways have to be dual gauge or broad gauge tracks. For the design changes, project work could not start before 2018, Sultan noted. 

The delay in financial approval is another reason for the project being implemented under the Indian Line of Credit, he also said. 

Experts say because of slow implementation of projects, the government's spending on development projects is increasing gradually and the country is being deprived of expected outcomes from the projects. 

Transport and communication expert Professor Dr Md Shamsul Hoque said projects lingering for years are the results of fragmented and unplanned development as well as unaccountability. 

"All the projects are part of the railway's master plan. The government is not getting benefits of these projects owing to a long delay. Time overrun and cost overrun cause losses," Shamsul noted.  

The country's philosophy of development should be scientific and economy driven, he added. 

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