Will the Bangladeshi mega projects pay off expected benefits? 

'Development' has become a political phenomenon in Bangladesh. Instead of investing massive grants in intangible human development elements, quality life, mass transportation, respectful employment, universal health coverage, quality education, universal pension, unemployment benefit and other meaningful social safety allowances, the government mostly focuses on tangible aspects that are visible to the naked eye. 

From the government's point of view, mega projects such as Padma Bridge, Padma Rail, Karnaphuli Tunnel, Payra Port, Rooppur Nuclear plant, Matarbari Deep Sea Port, Moheshkhali thermal plant and oil depot, Rampal thermal power station, Dhaka Metro Rail, etc would bring about high GDP growth. 

But are the megaprojects of Bangladesh going to pay off their promised benefits and economic utilities over time? To what extent are these development projects going to improve people's lives? 

The current 'development' model cannot account for the growing wealth inequality in Bangladesh. It does not relate to ordinary people's suffering behind the TCB grocery trucks, continuous energy, and commodity price hikes, the declining working environment, growing job risk, and poor wages in the private and informal job market, which is 87% of the total labour market. That is, the promises of the megaproject-based development narratives are yet to be fulfilled as reflected in the living standards of the ordinary people.

The Padma Multipurpose Bridge

The road lanes of the Padma Multipurpose Bridge are scheduled to be inaugurated this year, while the single rail track will be opened later. The inclusion of a single rail track has caused some technical and cost impacts on the state-of-the-art river bridge of Jamuna, which is suffering from cracks and needs costly maintenance at certain intervals. 

Yet, it seems like we have not learned enough from it. The Padma river bridge is made as a brass bridge, which has doubled the cost of the megastructure. The absence of double rail tracks will cause significant travel delays. Like the Jamuna rail bridge, probably a new Padma rail bridge too had to be built instead of incorporating one into the current one.     

The government and the bureaucracy must be capable enough and be efficient in quality and timely implementation. Otherwise, the mega project-based development narrative will not create as much timely economic utility and employment opportunity as it promises. 

Due to a lack of accountability and the necessary technical expertise, various projects including the Padma bridge suffered from wrong design and poor-quality feasibility studies. For instance, complications arose in the design of 14 pillars of the Padma Bridge in 2016. Design inputs have been copy-pasted from only 11 actual test piles. Meanwhile, there are errors in the feasibility study and design of the Padma Rail Link project too. The via-duct plan of the Padma rail track was also found faulty. 

Similar errors were found in the design of the Rupsha Railway Bridge, which is part of the Khulna-Mongla Port Railway Project. The Khulna-Mongla port railway section also has design defects. Design issues were reported in Dhaka-Mawa 4 lane and Dhaka-Chattagram 4-lane projects. 

Design and implementation mistakes like these delay the revenue-generating phase of the projects. It increases the project duration and increases the cost of the project. For example, the 55km long Dhaka-Mawa-Bhanga highway is the most expensive highway in the country and in the world, where more than Tk200 crore have been spent per kilometre. But it is not able to generate revenue as the toll plaza is not ready yet. Every such project experienced expenditure hikes at multiple stages, which had an immense impact on the toll rate. 

The Padma bridge is expected to contribute a 1.23% increase in GDP growth levels, connecting a minimum of eight districts directly with the capital. But if the toll is high, the government will dry up the increased economic benefits expected from the bridge.

Payra Port and coal hub 

Payra is essentially a river port with the flavour of a seaport. The wide river channel of Payra is a shallow one because of the continuous sedimentation from the mighty Himalayan rivers. The Japanese feasibility study says it needs continuous capital dredging to keep the port active. But this message is being overlooked by the local planners and politicians. 

Imagine a 40-nautical-mile-long, 220-metre-wide area that needs regular dredging up to 10 metres on a regular basis! It demands 300 to 500 million dollars annually.  The JICA report explicitly says 'these expenditures would not be feasible.' 

Only after spending a few thousand crores and borrowing another Tk5,000 crores from the foreign currency reserves for capital dredging, did the government eventually realise that Payra could never become a deep seaport. 

Yet they are moving ahead with it as a regular seaport. One wonders whether Payra  Port will be able to earn the Tk5,000 crore it borrowed in the next 20 years or so.

Rooppur Nuclear Power Plant 

Rooppur Nuclear Power Plant (RNPP) is Bangladesh's largest infrastructure project to date. According to the original plan, the power plant was supposed to start generating 1,200 MW of electricity in 2021, 2,400 MW by 2022, and 4,000 MW by 2030. 

In reality, the first reactor has been installed. But as of now, no electricity transmission line has been designed or built yet. So, even if the reactor gets ready it will not be able to move into production, the government will have to pay capacity charges against the idle plant. 

The same thing happened in the recently inaugurated thermal power plant Rampal, which in its rights was a widely controversial project. On top of that, the government is having to pay expensive capacity charges as the transmission line for the project is not yet ready for full capacity.    

Moreover, the construction cost of the RNPP has been estimated at Tk1,13,000 crore. Russia is providing 90% of this money as loan assistance. In the wake of the Ukraine war, there are rising concerns about the project's production and operation capability, as the Russian financial system has been sanctioned. 

There is widespread ambiguity about its ultra-high-cost model as opposed to international cost standards of similar projects running in India and Indonesia. Intellectuals are also puzzled by the ambiguity of nuclear waste management.  

Bangladesh has not yet gathered any operations and maintenance experience of the nuclear power plant so far. Yet the government is planning to set up another nuclear power plant on the south coast, right next to the Sundarbans. Building a nuclear power plant in an area, where cyclones and catastrophic tidal surges like Aila and SIDR took place, is like playing with fire.

Coal-fired power plants

Currently, the electricity generation capacity in Bangladesh stands at 25,000 MW. But we can only transmit a maximum of 14,000 MW. On top of that, Bangladesh is still purchasing a few thousand MW of cross-border electricity from India. 

Then there are environmental concerns. Bangladesh is yet to reach the 5% mark of non-nuclear green electricity production. Despite growing global concern regarding climate change, the construction of many private and public coal-fired power plants is currently underway. 

The government has extended five unnecessary rentals and quick rentals that have not produced electricity for over a year. Over the past 12 years, the Bangladesh Power Development Board (BPDB) has paid Tk76,287 crores in electricity generation. In FY 2020-21 alone, purchasing electricity from the rental power plants cost BPDB approximately Tk3,338 crores. 

The issue is this public expenditure is not paying off the promised economic utilities. And that's the reason we do not see the reflection of the development narratives into the common people's livelihood improvement and employment.  

There are some other mega projects like Karnaphuli Tunnel, CTG-Cox's Bazar-Ghundhum railway, Mawa-Payra railway, Matarbari deep seaport, Moheshkhali power plant and oil refinery, Chittagong bay port, Dhaka Airport terminal expansion. There are plans to build five metro rail routes, including a BRT in the capital Dhaka, by 2035. 

13 years from now, when all the metrorail routes will be launched, only 17% of the transportation pressure will be handled. The traffic jam situation is not being solved completely by the metro, the reason is that Dhaka development is not integrated with the decentralisation of the administration and economy. 

Many of the megaprojects like Dhaka Airport expansion, projects expanding the highways to four lanes as well as the Chattogram bay port are highly necessary and due on time. Yet in the mix, we have quite some highly expensive but nonproductive foreign loan-based projects too. 

Bangladesh Bank's total public and private outstanding foreign loans are $90.7 billion as of Dec 2021. Hence, Bangladesh should be concerned about projects that do not generate fair revenue on time. 

At the end of the day, it's the public money and the remittance from which the government has to pay the interest premiums. Projects that cost double yet do not get ready on time are always a burden. We must integrate megaprojects with utmost cost-benefit feasibility. 

The government and the bureaucracy must be capable enough and be efficient in quality and timely implementation. Otherwise, the mega project-based development narrative will not create as much timely economic utility and employment opportunity as it promises. But wealth inequality will surely be raised, and debt service payment issues will intensify when the grace period of all the foreign currency funded megaprojects comes to an end. 

Faiz Ahmad Taiyeb is a Bangladeshi columnist and writer living in the Netherlands. He is the author of 'Fourth industrial revolution and Bangladesh' and '50 years of Bangladesh economy.' He can be reached at [email protected].

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.