Cost Soars for Dhaka Metro Rail Lines 1 and 5 in Revised Proposals

Revised proposals detailing substantial cost increases for mass rapid transit projects in Dhaka have been officially sent to the Planning Commission. The updates concern MRT Line-1 and MRT Line-5, which are managed by the Dhaka Mass Transit Company Limited (DMTCL). The proposals were forwarded through the Road Transport and Highways Division following review by an independent expert committee that was formed in May. The committee submitted its report at the beginning of the current month, and the revised proposals reached the Planning Commission last week in Dhaka, Bangladesh.

According to the facts, the independent expert committee evaluated the economic feasibility of the projects based on current and proposed designs, noting that this was not an engineering survey. Shamim Z. Basuunia commented on the findings, stating that the committee examined the economic feasibility based on current and proposed designs, noting it was not an engineering survey, and that analysis revealed a significant increase in project costs along with major design changes for several stations. The committee's assessment also addressed potential alternatives regarding international financing and interest rates.

Addressing the implications of altering funding sources, Shamim Z. Basuunia further stated that if these projects were canceled and restarted with financing from a new development partner, there might not be an opportunity to secure loans at such low interest rates. Japan has proposed an interest rate of 0.9 percent for these railway infrastructure projects. Financial analyses for the evaluations considered an inflation rate of 5 percent as part of the economic review framework involving domestic and international stakeholders.

Specific financial figures indicate massive expansions in the initial budgets for both urban transit corridors. MRT Line-1 has a length of 31 kilometers, with its original estimated cost standing at 52,561 crore taka. However, according to the independent expert committee's estimation, the cost of MRT Line-1 may increase to approximately 110,000 crore taka. Furthermore, the revised proposal submitted by DMTCL sets the total cost for MRT Line-1 at 120,794 crore taka, which includes a Japanese financing proposal of 85,535 crore taka, compared to the original proposal where the Japanese loan amount was 39,450 crore taka.

Similarly, financial projections for MRT Line-2 show comparable expansions from the original framework. The original estimated cost for MRT Line-5 was 41,238 crore taka. The independent expert committee estimated that the cost of MRT Line-5 could rise to between 88,000 crore taka and 90,000 crore taka. In the revised proposal from DMTCL, the cost for MRT Line-5 is projected at 93,190 crore taka, with Japanese financing estimated at 68,931 crore taka, contrasting with the original proposal's Japanese loan amount of 29,117 crore taka.

Despite the steep escalation in projected expenditures, capital outlays have already commenced on the ground in Dhaka. Up to June of last year, expenditures reached 3,176 crore taka for the MRT Line-1 project and 5,011 crore taka for the MRT Line-5 project. Combined, these figures indicate that a total of 8,187 crore taka has already been spent across the two designated transit projects prior to the formal submission of the revised proposals to the Planning Commission, Ministry of Finance, and relevant bodies including BUET, University of Asia Pacific, and the independent expert committee.