War casts shadow on mega-projects also

Around a dozen of ongoing mega-projects hit a stumbling block thanks to pricier construction materials and a supply crunch in the local market prompted by the Russian invasion of Ukraine, as the authorities say the issue may lead to cost and time overrun.  

The projects have already faced some of the fallouts: contractors in some cases have slowed down the work, some are looking to raise the work rate, while some suppliers are cashing in on the situation.         

For example, constriction of the 172km railroad from Dhaka to Jashore via the Padma bridge is feared to require more allocation while the project might miss the current deadline.

"The project cost is set to go up as the contractors are insisting for a rescheduled rate owing to pricier construction materials," the rail-link Project Director Afzal Hossain told The Business Standard.    

Chinese contractors are making the railroad, which is also funded by Beijing. The project director added that the project deadline will have to be extended if the tight supply and spiralling freight costs do not ease up anytime soon.          

However, the construction of the much-anticipated Padma Bridge is still on the right track despite the war shocks.  

"Spiralling prices of construction items are obstructing our progress since we source a number of construction materials from the local market," Md Shafiqul Islam, project director of the road-rail multipurpose bridge, told TBS.          

Meanwhile, Project Director of Dohazari-Ramu-Cox's Bazar and Ramu-Gundum railroad construction Md Mofizur Rahman alleged some local suppliers are overcharging them in the pretext of Russia-Ukraine conflict.   

"It's simply price and supply manipulation. The impacts are supposed to affect us three months later, but some local steel manufacturers have already slowed down the supply, exposing us to a potential project delay," he told TBS.    

Aameir Alihussain, managing director of steel-reroller BSRM, disagreed with the manipulation remarks. Shifting the blame to some unscrupulous steel dealers who are hoarding the item to make a quick buck, he claimed BSRM's supply to the public project is normal.   

He, however, said the company might raise rod price by Tk8,000-10,000 per tonne next month owing to price hikes of rod-making scrap in the international market.    

The project was commissioned at a cost of Tk34,988 crore with the deadline of 30 June this year. The cost was subsequently raised by Tk4,269 crore to Tk39,246 crore, and the new deadline was set at June 2024. The progress has logged about 50% progress so far.

Already riddled with numerous issues, Gazipur-Dhaka airport Bus Rapid Transit (BRT) project may face another blow thanks to the Russia-Ukraine conflict, according to project director (road portion) ASM Elias Shah.  

The BRT project was commissioned in 2012 to build a separate dedicated lane for high-speed buses covering a distance of 20 km from the airport to Gazipur.

"Any project usually has a space to raise the contract price as per the inflation outlook. But the contractor this time claimed that construction material prices have surpassed the inflation figures published by the BBS [Bangladesh Bureau of Statistics]," Elias Shah told TBS.

Surprisingly, the Rooppur Nuclear Power Plant, another ongoing mega-project funded and constructed by Russia, rises to the occasion in terms of war gloom. Around 3,500 Russian and 350 Ukrainian engineers and workers are building the nuke power plant.  

A total of 1,200 Bangladeshi workers, who will run the power plant, will be trained in Moscow in phases. Currently, a Bangladesh team is in Russia for the training, and they are safe, said an official of the project while talking to TBS preferring anonymity.  

But the official said many workers could get their salaries blocked in the future if the Russian funding stops or faces delay in disbursement due to sanctions.

Elenga-Hatikamrul-Rangpur 4-lane highway Project Director Md Waliur Rahman said soaring crude prices are edging up the prices of everything. Besides, the war caused a serious stir in the rod-making scrap market.    

"Rod and cement are already high, while pricier coal will force you to pay more for bricks. With too many difficulties, it is not possible to carry on the work smoothly," he noted.   

Md Shahabuddin Khan, project director of Dhaka-Ashulia Elevated Expressway, said the main construction work will begin in the next one or two months. As a result, the Ukraine-Russia war may not have much effect at the moment. But it will have an impact in the long run.

"If the construction items keep spiking, we will have to adjust the contract price," he said.  

Bangabandhu Sheikh Mujib Railway Bridge Project Director Al Fattah Md Masudur Rahman said it is still unclear whether there would be any effect of the war on the work since the raw materials would come from East Asian countries including Japan and Vietnam.

He also referred to his contingency plan – "price adjustment".