Dhaka Bypass Expressway Project: Moves ahead finally
Upgradation of Dhaka Bypass Road into a four-lane access-control expressway under the first-ever Public Private Partnership project of Roads and Highways Department (RHD) is finally making progress.
But the project cost is going to rise significantly as it took five years to pick the private partner, acquire land, and manage fund.
The original deadline of the project was June 2020 and the cost for "Support to Joydebpur-Debogram-Bhulta-Madanpur road (Dhaka Bypass) PPP Project" was Tk 236.50 crore.
The RHD has now sought an extension to the project completion deadline up to June 2024 and increase the support project cost to Tk 674.74 crore, a rise by 185.30 percent from the initial estimated cost.
The revision proposal is likely to be placed before the meeting of the Executive Committee of the National Economic Council (Ecnec) today, sources said.
The project cost will rise to Tk 3,262 crore, up from the primary estimation of Tk 3,039 crore, due to expansion of the project.
However, the private partner has already managed funds and started the physical work. The RHD has also been able to acquire 73 percent land for the project.
"The major challenge for the project was to manage funds by the private partner, which is now over. We hope the physical work will be completed by December 2023," ABM Sertajur Rahman, deputy director of the project, told The Daily Star yesterday.
FIRST PPP PROJECT OF RHD
The government wanted to expand the two-lane Joydevpur-Debogram-Bhulta-Madanpur road, widely known as Dhaka Bypass Road, into a four-lane highway for better communication between Chattogram port and the country's north-western regions.
The 48km road connects the Joydevpur-Tangail National Highway, Dhaka-Chattogram National Highway, Dhaka-Sylhet National Highway, Dhaka-Mymensingh National Highway along with some regional highways and district roads.
Once the project is completed, buses, trucks and other vehicles will be able to easily travel from northern and western parts of the country to eastern and southern parts without entering Dhaka city.
In September 2012, Cabinet Committee on Economic Affairs gave approval in principle to the project to be implemented under PPP.
The Ecnec in March 2016 had approved the support project for land acquisition, resettlement and shifting of utility lines for the expansion works.
The RHD on December 6, 2018 signed a contract with a China-Bangladesh consortium to upgrade the road to a four-lane access-controlled expressway.
The companies are: Sichuan Road and Bridge (Group) Corporation Ltd of China (60 percent), and Shamim Enterprise (Pvt) Ltd (30 percent) and UDC Corporation Ltd (10 percent) of Bangladesh.
WHY THE DELAY, COST ESCALATION?
As per the deal, the road authority will provide land, carry out resettlement and shift utility lines while the private partner will finance, build, operate and maintain the road for a concession period of 25 years.
The partner will collect toll from vehicles following a fixed rate.
At the time of signing of the agreement, the estimated cost of the physical project was Tk 3,039 crore. Of the amount, the government was supposed to provide Tk 224 crore as viability gap financing.
The work for expansion of the highway, with service lanes on both sides, was supposed to be begin within nine months of signing of the deal and the road was expected to be opened to traffic by 2022, officials said previously.
But the private partner could not manage funds until April this year and the RHD could not complete land acquisition, causing the delay in project implementation.
Road Transport and Bridges Minister Obaidul Quader had laid the foundation stone of the project in December 2019, but it did not see any progress mainly due to Covid-19 pandemic, said officials.
Asked why the support project cost is going to increase, Sertajur said when the project was approved in 2016, they had to pay the affected people two times the actual price of their land.
But a new land acquisition law came into force in 2017 and now the government has to pay the affected people three times the actual price of their land and two-times the actual price of the existing structures on the land, the deputy director of the project said. "So, the government has to bear the additional costs."
The RHD has to acquire 13 acres more land for the project due to some modifications of the road design, leading to escalation of the cost.
On April 23 this year, the private partner, formally known as Dhaka Bypass Expressway Development Company Ltd, singed a financing agreement with China Development Bank (CDB) and Bangladesh Infrastructure Finance Fund Ltd (BIFFL). As per the deal, CDB will provide Tk 1,614 crore and BIFFL Tk 1,075 crore, source said.
Earlier, Asian Development Bank agreed to provide a credit of $100 million to BIFFL for granting the loan to the private partner.
However, the private partner started the physical work of the project in October last year with its own fund. The company is expecting to start getting bank loan from August, the sources added.