Planning commission meet proposes cut in MRT-5 project spending

An inter-ministerial meeting has decided to reduce the cost of several components of the Dhaka Metro Line-5 Southern Route project.

The 17.20km metro rail line will be built from Gabtoli to Aftab Nagar under the ADB-funded Project Readiness Financing (PRF) scheme with the project cost proposed to be Tk54,619 crore.

The Dhaka Mass Transit Company Limited, an autonomous body under the transport and bridges ministry, is executing the project. The proposed cost is nearly twice the Tk31,000 crore budget for the Padma Bridge.

The implementing agency agreed to rationalise the project cost at the Project Evaluation Committee meeting held at the Planning Commission on Tuesday.

Planning officials said some components of the project were initially proposed at a considerable sum, which will be brought down at a reasonable level.

For example, they said the meeting discussed the high cost of Tk1,769 crore proposed for consultancy fee, even though the detailed engineering design is already finished.

Besides, it has been decided to reduce the cost of land acquisition, car purchase, and officials' honorarium to a reasonable level, they said.

Mohammad Emdad Ullah Mian, member of the Physical Infrastructure Division of the Planning Commission, chaired the meeting.

He told The Business Standard the commission queried about the reasoning behind expenditure proposals for different aspects of the project at the meeting.

"It was agreed that the implementing agency would review and rationalise these proposals. The project proposal will be restructured and resubmitted to the commission," he added.

Project Director Abdul Wohab told TBS that once the review is finalised, the total project cost will be clarified, noting that costs for some components may decrease while others may increase.

"Following the completion of official procedures, the revised cost will be presented to the National Economic Council for approval," he added.

As per the implementing agency, the Dhaka Mass Transit Company Limited, the project is targeted to be completed by 2030.

The Asian Development Bank (ADB) will lend $2.3 billion, and Korea $1.3 billion, making a total of $3.6 billion for the project.

Which segments may face cost cuts 

According to commission sources, the project aims to acquire around 138.551 hectares or 342 acres of land, with a proposed allocation of Tk4,716.43 crore for compensation. Additionally, the plan includes the construction of four station plazas.

The Planning Commission suggests reducing land acquisition to a more reasonable level and reevaluating the Station Plaza issue to lower project costs. 

Furthermore, a review of the estimated expenditure of Tk98.45 crore for renting 58 vehicles (23 jeeps, 15 pickups, 14 microbuses, and 6 motorcycles) has been scheduled.

The meeting decided to review the Tk3,600 crore proposed for rolling stock and equipment in depots, Tk20,637 crore for mainline civil and station works, and Tk11,993 crore for electrical and mechanical sector.

The commission also noted that Tk203.5 crore ($18.75 million) for the Reserve for Commitment Charge on ADB Loan and Tk5846.74 crore ($538.71 million) for Interest on Foreign Debt (interest during construction).

Adding these parts to the project during the proposal phase doesn't make sense because they're not essential components, as decided at the meeting. 

Additionally, officials discussed various expenditures, including Tk2.52 crore for honorarium, Tk5 crore for seminars/conferences, Tk3 crore for training (foreign and domestic), Tk9.66 crore for vehicle maintenance, Tk1.86 crore for telex/fax/internet, Tk5 crore for legal expenses, Tk2.32 crore for advertisement and publicity, and Tk1.62 crore for office stationery.