Hike funding

A funding setback can delay start-up

The Mass Rapid Transit Line-2 project, another metro line to be developed from Gabtoli to Chittagong Road on the Dhaka-Chattogram highway, is facing a setback with authorities now seeking to change how it would be funded and implemented.

The project was to be implemented under the government-to-government (G2G) PPP (public-private partnership) model with Japan.

But the metro rail authorities are now seeking to implement it under a government initiative, as they find the options that Japan has recently offered under the PPP model unacceptable.

In the meantime, between the initial plan and the latest development, five years have passed.

The PPP authorities will adopt a new position ahead of the ongoing fifth meeting of the Bangladesh-Japan PPP Joint Platform in Japan, and the final decision is expected to be made there, officials said.

The joint meeting of the PPP platform started on October 3 and will continue until October 7.

Physical works on the 24km-long line were due to start in 2024 and be completed by 2030. There may now be a delay due to recent developments regarding funding and the mode of implementation, officials said. responsible.

Meanwhile, Dhaka Mass Transit Company Ltd (DMTCL), the executing agency for the rail metro projects, last month sent a proposal to the road transport and highways division for a feasibility study of the project.

Funding for the study, however, has not yet been determined.

The government plans to build a metro rail network of around 130 km with six lines criss-crossing Dhaka and adjacent areas by 2030 in a bid to reduce traffic congestion and pollution.

The first metro line from Uttara to Motijheel is expected to be partially open to traffic in December.

Under the G2G-PPP agreement, Bangladesh can request other governments to provide financial support to implement the project, and that particular country will select a public or private entity to act as an investor.

Japan is providing funds for the first three subway lines – MRT Line 6, 1 and 5 (northern route) – with soft loans.

MRT-LINE 2

The 24 km line, which will have elevated and underground sections, will start from Gabtoli and will touch Basila, Mohammadpur, Jigatola, Science Lab, Nilkhet, Azimpur, Central Shaheed Minar, Police Headquarters, Gulistan, Motijheel, Arambagh, Kamalapur , Mugda and Demra before reaching the point of Chittagong Road.

Bangladesh and Japan had signed an agreement to implement the MRT Line-2 project under the G2G PPP initiative.

The issue was discussed in the four Bangladesh-Japan Joint PPP Platform meetings held between December 2017 and December 2020.

In November 2018, the Cabinet Committee on Economic Affairs approved in principle the proposal to implement the project under the PPP initiative, documents show.

Japan has even chosen one of its big companies — Marubeni Corporation — as a private partner in the project.

However, the PPP search, conducted by Japanese authorities in 2020, “did not find the project economically viable,” said MAN Siddique, managing director of DMTCL.

The line had been deemed viable in the strategic transport plan in 2005 and the revised STP prepared by the government in 2016.

In this context, Japan conducted another study some time after 2020. It found the line economically viable, MAN Siddique added.

But Japan has offered several options to implement it under the PPP model, he said.

In one option, the Japanese side said the metro rail authorities would build the line and Japan would be responsible for operating and maintaining the line under the PPP initiative.

In another, he said that the metro railway authorities will carry out the civil works (viaduct and tunnel) and provide some amount of money as Viability Gap Finance, while the Japanese side will install railways and construction. ‘other equipment, will purchase subway trains and take care of operation and maintenance.

But metro rail authorities could not agree to those options, Siddique said.

THE PROJECT FACING THE DELAY

A June 23 meeting at the Prime Minister’s Office regarding PPP projects decided to remove the MRT Line-2 project from the list of G2G PPP projects, documents show.

The meeting also decided to implement the project with the assistance of development partners under a government initiative.

On August 22, the Road Transport and Highways Division sent a letter to the PPP authorities regarding the new decision and asked them to submit it to the fifth meeting of the Bangladesh-Japan Joint PPP Platform.

“We hope a final decision will come out of the meeting,” Siddique said.

He added that the surveys and other work done as part of the PPP research and background study will be useful for future work.

When asked if the new decision would cause a delay in the start of physical works, he skipped a straight answer. He said the authorities will now have to carry out a feasibility study and some other work.

“If we can’t do it within two years, we can do it within three years… In that case, we will have to work fast to complete the work by 2030,” he told the media yesterday. DailyStar.

Along with the change in implementation mode, there are two other developments regarding the project.

On September 26, the DMTCL transmitted the preliminary proposal for the development project to the road transport and roads division so that it could transmit it to the Urban Planning Commission for the realization of a feasibility study of the project.

DMTCL sent another project to the division on September 25 for land acquisition under Damaripara and Matuail moujas to build the metro line depot.