TL;DR:
- The MRT-5 Southern Route project cost has been reduced by Tk6,898 crore (15%) after a review by DMTCL.
- The cost cut was achieved by shortening the loan interest repayment period and reducing inflated contingency estimates.
- The revised project cost is now Tk47,721 crore, with Tk39,138 crore covered by foreign loans from ADB and South Korea.
- The government is considering alternatives to MRT-5, such as MRT Line-2, which would better serve Old Dhaka.
The cost of the Mass Rapid Transit (MRT) Line-5 Southern Route, a major infrastructure project in Dhaka, has been reduced by nearly Tk7,000 crore following a comprehensive review initiated by the interim government. The project, which spans 17.20 km from Gabtoli to Dasherkandi, originally had an estimated budget of Tk54,619 crore under the previous Awami League government. However, after a reassessment led by the Dhaka Mass Transit Company Limited (DMTCL) and directed by the Planning Commission, the cost has been revised down to Tk47,721 crore—a reduction of approximately 15%.
The review was prompted by the interim government’s focus on reassessing large-scale projects for potential cost savings. Prof Wahiduddin Mahmud, an adviser to the interim government, played a key role in initiating the re-evaluation. DMTCL Managing Director Mohammad Abdur Rouf confirmed that detailed design adjustments were made to various components of the project, resulting in significant savings. The revised proposal has been submitted to the Road Transport and Highways Division for further scrutiny, which could lead to additional cost reductions.
Project Director Md Abdul Wohab explained that the cost reduction was achieved through several key measures. One of the most impactful changes was shortening the loan interest repayment period, which saved Tk4,700 crore by aligning interest payments with the project’s timeline. Additionally, inflated contingency estimates were reduced, and capital expenditures were refined based on more accurate market prices and detailed designs. These adjustments contributed an additional Tk1,500-2,000 crore in savings.
Wohab emphasized that initial project estimates often include extra materials to accommodate future adjustments. However, with more precise designs now available, overestimations were avoided. He also noted that if the exchange rate remains stable, further reductions in costs could be possible; however, fluctuations in the dollar rate could increase costs by Tk800-1,000 crore.
Despite these reductions, there are still concerns about whether MRT Line-5 is the best option for Dhaka’s transportation needs. The government is reportedly considering alternatives that would better serve Old Dhaka, which is not included in MRT-5’s current route. One alternative under consideration is MRT Line-2 (Gabtoli-Sadarghat-Narayanganj), which would pass through Old Dhaka and provide a more comprehensive metro network for densely populated areas.
The MRT-5 Southern Route will feature both underground and elevated sections: 13.10 km of underground track from Gabtoli to Aftabnagar and 4.10 km of elevated track from Aftabnagar to Dasherkandi. The project is expected to be funded primarily through foreign loans, with Tk39,138 crore already pledged by the Asian Development Bank (ADB) and South Korea.
Transport experts have raised concerns about inflated costs in previous infrastructure projects. Professor Shamsul Hoque criticized past practices where project estimates were approved without sufficient scrutiny, leading to inflated budgets. He urged the current government to thoroughly review all ongoing and upcoming projects to ensure accountability and prevent unnecessary spending.
As discussions continue about potential alternatives and further cost reductions for MRT Line-5, it remains clear that Dhaka’s metro rail network is a critical component of efforts to alleviate traffic congestion and improve urban mobility. However, careful planning and financial oversight will be essential to ensure that these projects are executed efficiently and within budget constraints.
Source: TBS News
