Rampant corruption in development projects in 15 years

Highlights:

• Project costs rose by an average of 70%
• Completion delays exceeded five years
• Tk1.61–2.80 lakh cr of ADP lost to corruption
• Up to Tk98,000 crore paid as bribes to govt officials
• Tk70,000–1,40,000cr pocketed by politicians, their aides

Corruption in large-scale public projects has resulted in significant financial losses and prolonged delays, according to a draft of the White Paper on the state of the economy.

The White Paper committee yesterday submitted its report to Chief Adviser Professor Muhammad Yunus at his Tejgaon office in Dhaka. Eminent economist Debapriya Bhattacharya, the committee chair, led the delegation.

According to the White Paper, during the 15 years of Sheikh Hasina regime, project costs rose by an average of 70%, and completion delays exceeded five years. Of the $60 billion invested in development projects through the Annual Development Programme (ADP), an estimated $14–24 billion (Tk1.61–2.80 lakh crore) was lost to corruption, including political extortion, bribery, and inflated budgets.

The White Paper report identifies widespread misappropriation of funds during land acquisitions and the appointment of politically favoured project directors as key factors undermining the efficiency of infrastructure and social investments. 

It estimates that between Tk77,000 crore and Tk98,000 crore were paid as bribes to government officials, while Tk70,000–1,40,000 crore went to politicians and their associates through extortion and collusive payments. These corrupt funds were often laundered abroad or reinvested domestically in untraceable sectors such as real estate and agriculture.

The analysis highlights a troubling trend of cost escalation in megaprojects. For instance, the Padma Multipurpose Bridge Project's cost rose by 222% from its initial estimate of $1.2 billion to $3.868 billion. Despite significant investments in transport, rural infrastructure, and power, corruption has raised concerns about the effective use of public funds.

The report identifies political motivations often overshadowed sound economic planning. Election years, such as 2014 and 2017-18, saw spikes in ADP expenditures, with projects approved hastily to serve as political showcases. Ceremonial events, like foundation stone layings, frequently marked the "completion" of projects long before they were ready for use. Terminal 3 at Dhaka Airport and the Bijoy Sarani flyover are stark examples.

The White Paper criticises the government's approach to project feasibility studies, pointing to inadequate expertise within ministries to assess technical and financial returns. As a result, many projects required multiple revisions, leading to time and cost escalations. A 2023 study found that 86.4% of projects experienced overruns, undermining their overall viability.

The draft finding shows procurement processes were also found to be less stringent in revised project plans. The Matarbari 1200MW Power Plant exemplifies how poor management led to inefficiencies.

The report mentions despite ambitious undertakings such as the Karnaphuli River Tunnel and the Dhaka metro rail, Bangladesh's infrastructure continues to lag behind, with deficiencies limiting the country's economic potential and attractiveness to foreign investors. 

The White Paper observes that corruption, inefficiencies, and political agendas have significantly compromised the benefits of public investment, turning many projects into costly symbols of superficial progress rather than drivers of sustainable development.

Construction costs 4 times higher than in India

The White Paper report finds construction costs in Bangladesh were significantly higher than regional counterparts, while the quality of infrastructure remains comparatively lower.

The cost of building a four-lane urban arterial road in Bangladesh was 4.4 times higher than in India and 2.15 times more expensive than in Pakistan.

Specific projects highlight this disparity: the Rangpur-Hatikumrul four-lane transport link cost $6.47 million per kilometre, while the Dhaka-Sylhet Highway reached $7.06 million per kilometre. The Dhaka-Mawa-Bhanga four-lane Highway Project was priced at Tk113.7 crore per kilometre.

The White Paper analysis mentions that explanations for these inflated costs often included high land acquisition expenses, reliance on imported machinery, steep import tariffs, and challenges associated with floodplain construction. 

However, analyses by the Implementation Monitoring and Evaluation Division, investigative journalists, and reviews of project documents suggest that these factors failed to fully justify the cost discrepancies, the White Paper report mentions.