MRT Line-1 and Line-5 Costs Increase

The construction costs of Metro Rail Line-1 and Line-5 could more than double from their initial estimates due to the rise in the value of the US dollar, inflation and the introduction of new taxes, according to an independent government expert committee. According to the committee’s estimate, the construction cost of the 31-kilometre MRT Line-1 could rise from Tk 52,561 crore to around Tk 110,000 crore. The cost of MRT Line-5, initially estimated at Tk 41,238 crore, could increase to between Tk 88,000 crore and Tk 90,000 crore. Dhaka Mass Transit Company Limited (DMTCL) has sent a revised proposal for the two metro rail lines to the Road Transport and Highways Division. The division forwarded the proposal to the Planning Commission last week.

According to the revised proposal, the construction cost of MRT Line-1 has increased to Tk 120,794 crore, of which Japan will provide Tk 85,535 crore. The initial estimate put the total project cost at Tk 52,561 crore, including a Japanese loan of Tk 39,450 crore. The original project period was from September 2019 to December 2026. However, the revised proposal extends the deadline to December 2035.

For MRT Line-5, the proposed revised cost has been set at Tk 93,190 crore, including Tk 68,931 crore in Japanese financing. The original proposal estimated the total cost at Tk 41,238 crore, with Tk 29,117 crore coming from a Japanese loan. The original project period was from July 2019 to December 2028, but the revised timeline extends it to December 2034.

After the current government came to power, Finance and Planning Minister Amir Khosru Mahmud Chowdhury held a meeting with officials of the Planning Ministry and relevant departments.

Shamim Zed Basunia, a former professor at Bangladesh University of Engineering and Technology (BUET) and head of the expert committee, said the prices of almost everything has increased significantly compared with five or seven years ago, when the original Development Project Proposal was prepared. He said the value of the US dollar against the Bangladeshi taka had increased by 20 percent. In addition, tax rates had also increased. Based on the existing and proposed designs, the committee conducted an economic feasibility assessment, not an engineering survey.

“After conducting the assessment, we found that the cost has increased; that is all,” he said. He added that major changes had also been made to the designs of several stations. He said Bangladesh’s metro rail projects should not be compared with those in Delhi or Kolkata. “Think about it logically. India has diesel, iron, cement and stone available domestically. But what does Bangladesh have? We have to import more or less almost everything. Therefore, comparing the costs with those in India is meaningless,” he said.