Why do you need Tk 1,769.21cr for consultancy?

The Planning Commission has asked for an explanation regarding the amount metro rail authorities sought for consultancy services for the construction of a new metro line.

Dhaka Mass Transit Company Ltd (DMTCL) has sought Tk 1,769.21 crore for consultancy services for the construction of Mass Rapid Transit (MRT) Line-5 (Southern Route).

An explanation was sought from project authorities as to why such a large amount of money will be required for consultancy services as preparatory works for the project have already been done under a separate project.

The commission also raised some other questions about the project -- which will build a 17.20km metro rail from Gabtoli to Dasherkandi via Kalyanpur, Shyamoli, Asad Gate, Russel Square, Panthapath, Karwanbazar, Hatirjheel, Rampura, and Aftabnagar.

The estimated cost of the project is Tk 54,618.96 crore and the deadline is January 2024 to December 2030. The Asian Development Bank (ADB) and South Korea are expected to give Tk 39,138.26 crore, while the rest will be borne by the government.

Against this backdrop, the commission will hold a project evaluation committee (PEC) meeting today with Mohammad Emdad Ullah Mian, member of the Physical Infrastructure Division, in the chair, sources said.

The government has planned to build a 140km metro rail network comprising six lines in Dhaka and adjacent areas within 2030 to reduce traffic jams and pollution.

The first line, MRT Line-6 is now operational from Uttara to Agargaon, while construction of MRT Line-1 and MRT Line-5 (Northern route) is now ongoing.

MRT Line-2 and 4 are still at the preparatory level.

MRT LINE-5 (SOUTHERN ROUTE)

The DMTCL has already carried out the feasibility study for MRT Line-5 (southern route) under a project funded by Asian Development Bank (ADB).

Out of 17.3km, 13.1km would be underground and 4.2km elevated.

According to the working paper of the PEC meeting, the project authority has sought Tk 1,769.21 crore for consultancy services, which is 3.24 percent of the total project cost.

Of the Tk 1,769.21 crore, Tk 1,310.53 crore will come from loans, while the rest will come from the government exchequer.

When the detailed design of the project was drawn under a separate project, a detailed explanation is needed for such a huge amount of consultancy service, it reads.

The Planning Commission also asked why Tk 203.5 crore, which served as a commitment charge for the loan of ADB, and Tk 5,846.74 crore, which is for interest on the foreign debt, were included in the total project cost.

Because, as per the existing system, the Economic Relations Division usually pays the money from a particular fund, it reads.

Contacted, Project Director Abdul Wahab said Tk 1,769.21 crore was sought for hiring local and international consultants to supervise the entire project for next seven years.

"So, the amount is not that big. Usually, consultant service costs account for around 5 percent of the total project cost," he said, adding that they have to hire some more consultants as per the conditions of the ADB for environment assessment.

DMTCL hired consultants for MRT Line-5 (northern route), which would be a 20km line with both underground and elevated sections, at a cost of Tk 1,123 crore.

Asked why they sought more than MRT Line-5 (northern route) for consultancy services, Wahab said changes in dollar exchange and time were the main reasons behind it.

He said they have already started the advanced procurement process and hope to hire consultants within February next year if the project is approved soon.

Once the Planning Commission cleared the project, it would be placed before the Ecnec meeting for approval, he added.