Highway construction costs higher in Bangladesh than neighbours

The cost of constructing a four-lane highway in Bangladesh runs into millions of taka per kilometre, significantly higher than in neighbouring India and other Asian countries. This disparity has placed Bangladesh among the countries with the highest highway construction costs globally.

Currently, four-lane highway construction projects are underway on the Elenga-Rangpur stretch and the Dhaka-Sylhet-Tamabil route. Upgrading the Elenga-Rangpur highway to four lanes is costing 1 billion taka per kilometre, while the Dhaka-Sylhet-Tamabil highway upgrade is estimated at 1.15 billion taka per kilometre.

Similarly, the project to convert part of the Chattogram-Cox's Bazar highway into four lanes has an even higher cost of 3.06 billion taka per kilometre.

Previously, the cost of upgrading the Dhaka-Bhanga highway, via the Padma Bridge to Faridpur, reached 2 billion taka per kilometre.

These projects primarily involve expanding existing two-lane highways by adding two additional lanes. In addition, two separate lanes are being constructed on both sides for local vehicles.

The exorbitant expenditure on highway construction has also been mentioned in the White Paper on the Country’s Economic Situation. This white paper was presented to the chief adviser of the interim government, Professor Muhammad Yunus, on 1 December. The committee tasked with preparing the white paper was led by renowned economist Debapriya Bhattacharya.

The White Paper on the Country’s Economic Situation highlights that during the previous Awami League government, the cost of constructing a four-lane highway in Bangladesh was USD 635 million per kilometre - 4.4 times higher than in India. In Pakistan, similar roads cost less than half (2.15 times costlier in Bangladesh). China constructs comparable roads for half the cost, while Turkey constructs the same at nearly one-fourth the cost in Bangladesh.

From the fiscal year 2009-10 to 2023-24, the Roads and Highways Department (RHD) implemented development projects worth Tk 1.69 trillion, funded through domestic resources and foreign loans. A significant portion of this expenditure was allocated to road and bridge construction.

A report by Transparency International Bangladesh (TIB), published on 9 October last year, revealed that 23–40 per cent of funds allocated to RHD development projects over the 15-year period of the Awami League government were embezzled.

This amounts to an estimated Tk 290–510 billion. TIB pointed that this corruption was committed in tripartite collusion among ministers, MPs, and influential politicians; bureaucrats and related officials; and contractors.

Muhammad Fouzul Kabir Khan, Adviser to the Ministry of Road Transport and Bridges, told Prothom Alo that the inflated costs of infrastructure projects under the previous government were due to pre-arranged contracts. These predetermined agreements influenced tender conditions and project costs, leading to widespread corruption and irregularities.

Since taking office, the interim government has instructed the reduction of costs for new projects and initiated reviews of ongoing projects to address these issues.

The South Asian Subregional Economic Cooperation is known as SASEC for short. Under the SASEC-1 project, the four-lane highway project from Joydebpur in Gazipur to Elenga in Tangail has been completed.

In the meantime, a project to upgrade 190 kilometres from Elenga to Rangpur to four lanes was taken up in 2016. Initially, the cost of the project was estimated at 118.99 billion taka, that is, the cost per kilometre is about 630 million taka. The work was supposed to be completed in 2021.

In 2019, the cost was increased to 166.62 billion taka. The time was set for 2024. In 2023, the cost stood at 186.79 billion taka through special revision. After the last revision to the project proposal on 7 October, the cost has reached 195.60 billion taka. The project period has been extended until 2026. Now the cost per kilometer is more than 1 billion taka. The progress of the project work is about 80 per cent.

The Asian Development Bank (ADB) is providing a loan of more than Tk 110 billion for this project. The reasons for the delay in the implementation of the project are complications in land acquisition, the Covid pandemic, flood conditions, etc. As a result, the prices of land and products have increased. The cost of consultants has increased.

However, RHD sources say that every time the project proposal is revised, various components including new flyovers and subways have been added. The design has been changed repeatedly leading to a huge amount of cost increase.

The main work of the project to upgrade the Elenga to Rangpur highway to four lanes has been divided into 11 parts. Nine parts are related to the construction of roads, bridges, and flyovers. 

In the remaining two parts, the development of RHD’s research laboratory and the establishment of a weight control centre have been included. Five Chinese and four Bangladeshi contractor companies have been awarded the work. Additionally, some contractors from other countries are involved in the joint venture.

RHD sources stated that after signing agreements with the contractors, the cost of each part has increased by 18 to 46 per cent (variation), citing reasons such as additional work and rising prices. 

Among these, the highest cost increase of 46 per cent is for the 22.5-kilometre  section of the Bogura area. The contractor for this section is China State Construction Company and Japan’s Tanita (joint). Another section of work in Bogura, awarded to KMC-Monico (joint), saw a cost increase of approximately 42 per cent.

Abdul Monem Limited of Bangladesh has undertaken two sections of the project. The cost for one section has risen by 41.5 per cent, and by 34 per cent for the other. In another section, domestic company Mir Akhter Limited is working jointly with Hego Limited of the United Kingdom. Their cost has increased by 22 per cent.

The domestic organisation National Development Engineers (NDE) Limited has been awarded two parts of the work related to developing the laboratory and setting up the weight control centre for the RHD. The cost for one part has increased by 40 per cent, while the other has seen a 35 per cent increase.

According to RHD sources, most of the work under these two parts involves the purchase and installation of equipment. There is also some building construction included. The cost increases for these sections have been aligned with the general trend of rising expenses seen in the construction of roads and bridges.

In departmental tenders, variations exceeding 15 per cent are prohibited. However, while this 15 per cent limit is often followed for foreign-funded projects, no such rules were adhered to during the previous Awami League government.

SASEC-2 Project Director Waliur Rahman explained to Prothom Alo: “If there are no variations, the project will be compromised. This is because the design was created around 2013, and significant cost-cutting measures were implemented when the project was approved. As the work progressed, it became evident that the original design was not feasible, necessitating cost increases.”

The Chattogram-Cox's Bazar highway spans 151 kilometers. A project has been initiated to upgrade 28 kilometers of this highway to four lanes. However, work on the project has not yet begun. Approved in October 2023, the estimated cost of the project is 85.56 billion taka, equating to approximately 3.06 billion taka per kilometer.

For this project, the government will contribute 28.47 billion taka from its own funds, while the remaining 57.09 billion taka will come as a loan from the Japan International Cooperation Agency (JICA).

The Bangabandhu Sheikh Mujibur Rahman Highway, also known as the Expressway, from Dhaka to Bhanga in Faridpur, holds the distinction of being the country’s most expensive highway. This 55-kilometre highway was developed under two separate projects.

The first project was approved in May 2016, with an initial cost estimate of 62.52 billion taka, which was later increased to 68.92 billion taka. As additional components were introduced, a second project was initiated in 2018 to cover the remaining work.

The cost of the second project was initially estimated at 41.12 billion taka but later revised to 41.52 billion taka. Combined, the total expenditure for the two projects amounted to 114.44 billion taka, resulting in an average cost of approximately 2.01 billion taka per kilometre for the expressway. Notably, the initial cost estimate per kilometer was about 1.14 billion taka.

Debapriya Bhattacharya, head of the white paper preparation committee, told Prothom Alo: “Corruption, inefficiencies, and unreasonable expenses account for about 40 per cent of the costs in such large projects. Extra costs are often incorporated during the project planning phase, followed by the inclusion of additional components during implementation, leading to increased time and costs.”

The white paper published last December highlighted a comparative analysis of the cost of constructing four-lane highways per kilometre in Bangladesh and other countries. It stated that the cost in Bangladesh is USD 635 million per kilometre, which is significantly higher compared to other nations.

For instance, in China, the cost is USD 390 million per kilometre, while in India, it is only USD 145 million. Similarly, the cost is USD 295 million in Pakistan, USD 215 million in Indonesia, USD 115 million in the Philippines, and USD 170 million in Turkey.

Shamsul Haque, a professor at the Department of Civil Engineering at Bangladesh University of Engineering and Technology (BUET), explained to Prothom Alo that Bangladesh, being a low-lying country, requires more earthworks for road construction.

Additionally, many materials and products have to be imported, which contributes to the cost. However, he pointed out that these factors only justify reasonable expenditures, not the excessively high costs.

Questioning unnecessary expenditures, he remarked, “Why do people who have no connection with the project travel to several countries in the name of training?”

* The report, originally published in the print edition of Prothom Alo, has been rewritten in English by Farjana Liakat