The Bangladesh Prime Minister’s Office (PMO) has issued directions to significantly reduce the cost of two China-funded railway projects after carrying out a review, with authorities describing it as the first such action taken for ventures backed by Beijing.
The PMO directed the railway ministry to reduce the cost of the project to convert the metre-gauge line between Akhaura and Sylhet to dual-gauge line by 3,354.31 crore takas or 20.8% of the total cost, according to a report by The Daily Star newspaper.
The ministry was also directed to cut the cost of the project for upgrading the Joydebpur-Ishwardi dual-gauge line to dual-gauge double line by 1,495.52 crore takas, or 12.91% of the total cost. The directives were issued by a special committee reviewing the costs of three China-funded projects.
Such a directive from the PMO is “not only rare, but I think this is the first”, an unnamed Bangladesh railway official was quoted as saying by the daily.
The PMO had formed the special committee on September 30 to review three railway projects to be implemented with Chinese finance and by Chinese companies. The committee submitted its report within seven days.
Following the submission of the report, Prime Minister Sheikh Hasina issued the directive. The committee also made several observations and suggestions and the PMO asked for “necessary changes in the projects”, the report said.
Of the three projects studied by the committee, the Akhaura-Sylhet and Joydebpur-Ishwardi projects had been approved by the Executive Committee of the National Economic Council (Ecnec). Chinese companies had been selected to implement these projects and contract costs had been negotiated. The final loan and commercial deals were yet to be signed, the report said.
The Ecnec had approved the project to convert the Akhaura-Sylhet railway line in April last year at a cost of 16,104 crore takas. The contract cost negotiated with China Railway Construction Bridge Engineering Bureau Group Co Ltd was 12,079 crore takas. However, questions were raised about the cost.
The Joydebpur-Ishwardi railway project was taken up in January last year at a cost of 14,250 crore takas. It was scheduled to be completed by December 2024. The negotiated contract cost for this project was 9,839 crore takas and the selected company was the China Civil Engineering Construction Corporation.
The Bangladesh government’s move comes at a time when questions have been raised in several South Asian countries about the cost and implementation of several infrastructure and connectivity projects by China. In 2018, Nepal had scrapped an agreement with China’s Three Georges Corporation for building the $1.5-billion West Seti hydropower project.