3 Metro Rail projects in Dhaka to cost Tk 2.5 trillion

The government is set to implement three metro rail projects in Dhaka at a total cost of Tk 2.5 trillion (250,000 crore).

At a meeting of the Executive Committee of the National Economic Council (ECNEC) yesterday, Wednesday the government increased the costs of two metro rail projects and approved a new project.

One of the three projects will construct a metro rail route from Hemayetpur to Bhatara in Dhaka. Named MRT Line-5 (Northern Route), the project received approval in 2019, when its estimated cost stood at Tk 410 billion (41,000 crore).

Now, as construction is about to begin, the government has raised the cost to Tk 898.48 billion (89,848 crore). The metro rail route will be 20 kilometres long.

Another metro rail line is being constructed from the airport to Kamalapur. Named Line-1, the project was also approved in 2019, with an estimated cost of Tk 520 billion (52,000 crore).

Yesterday, Wednesday the government raised the cost to Tk 114,394 crore. The metro rail route will be 31 kilometres long.

As a result, the costs of the two projects have increased by Tk 1.1 trillion (110,000 crore), representing a 118 per cent increase.

The government is taking up a new project for a metro rail route from Gabtoli to Dasherkandi.

The project will cost Tk 455.03 billion (45,503 crore). Named MRT Line-5 (Southern Route), it will have a 17-kilometre route. Its cost appears comparatively lower.

Japanese contractors are behind the increased costs of the two projects approved in 2019. They have sought higher prices, citing the appreciation of the US dollar, increased material costs and design changes, among other factors. Japan is providing loans for the two projects.

After Awami League was ousted from power during the July mass uprising, the interim government did not take any decision on the metro rail projects.

Instead, it put pressure on the Japan International Cooperation Agency (JICA), highlighting the lower costs of metro rail projects in various countries. As a result, tensions developed in relations with Japan, Bangladesh’s largest development partner.

After the current government came to power, it formed a seven-member technical committee headed by former Bangladesh University of Engineering and Technology (BUET) professor Shamim Z Bosunia.

The government asked the committee to explore ways to reduce the costs. However, the committee found few options for cutting expenditure.

Shamim Z Bosunia told Prothom Alo in August, “Dhaka needs metro rail. If the government considers the cost too high, it can look for other lenders. However, the longer it takes, the higher the cost will be.”

Meanwhile, Japan had been urging Bangladesh to take a quick decision on the projects. Finally, the government approved the increased costs of the two projects as well as the new project.

The issue of increasing the costs of the two previously approved metro rail projects was not on yesterday’s Wednesday’s ECNEC meeting agenda. However, the matter was raised during the meeting and the government approved the revisions.

During a briefing for journalists after the meeting, State Minister for Planning Md Zonayed Abdur Rahim Saki explained why the costs of the two projects were increasing.

He said, “We have to carry out work deep underground to construct the stations. Therefore, the scope of work has increased. In addition, the exchange rate of the dollar, the prices of goods and the amount of taxes have also increased.”

The State Minister was also asked why the government had approved the two projects in such haste.

In response, he said, “When the projects were initially approved, the interest rate on Japanese loans was 0.7 per cent. Now it is slightly above 3 per cent. The interest rate on Japanese loans will increase further after this month. That is why the projects have been approved now. Otherwise, we would have to pay even higher interest.”

Under the loan agreements signed during the Awami League government, only Japanese contractors can participate in metro rail projects financed by Japanese loans. This limits competition.

In contrast, the project now being taken up with an Asian Development Bank (ADB) loan allows greater scope for competition. As a result, its cost is comparatively lower.

Dhaka Mass Transit Company Limited (DMTCL) is constructing and operating metro rail services in the country.

The organisation had planned to construct six metro rail lines in Dhaka by 2030, of which MRT Line-6 from Uttara to Motijheel is currently operational. More than 400,000 passengers travel on the line on average each day.

The extended section of the Uttara-Motijheel route will run to Kamalapur. Work on this section is under way.

The total cost of the entire route stands at Tk 334.72 billion (33,472 crore), or Tk 15.84 billion (1,584 crore) per kilometre. The project was taken up in 2012.

The Asian Development Bank (ADB) and South Korea are providing loans for the construction of MRT Line-5 Southern Route (Gabtoli-Dasherkandi).

Of the 17-kilometre route, 13 kilometres will run underground and the remaining four kilometres will be elevated. The project will cost Tk 26.77 billion (2,677 crore) per kilometre.

The average cost per kilometre of MRT Line-1 from the airport to Kamalapur, financed by a Japanese loan, will be Tk 36.9 billion (3,690 crore). Part of the route will run underground and part will be elevated.

The cost per kilometre of MRT Line-5 Northern Route from Hemayetpur to Bhatara has reached Tk 44.49 billion (4,449 crore). This route will also have both underground and elevated sections.

The Awami League government, which was ousted from power during the July mass uprising, undertook a series of major projects.

Various projects, including the metro rail and Padma Bridge, are delivering benefits. However, questions remain about the benefits of projects such as the Karnaphuli Tunnel.

According to the Finance Division, the government’s total outstanding debt stood at Tk 22.59 trillion (22.59 lakh crore) as of March 2026. Of this, Tk 9.63 trillion (9.63 lakh crore) was foreign debt. As government borrowing increases, so does its debt-servicing cost.

The budget for the current financial year allocates Tk 1275 billion (127,500 crore) for interest payments. However, Finance Division officials believe this expenditure could increase by a further Tk 250 billion (25,000 crore).

The government is also having to provide substantial subsidies to the power and energy sectors. It is against this backdrop that three metro rail projects costing Tk 250 billion (250,000 crore) have been taken up.

Many believe that metro rail is necessary to make travel easier for people in the capital. The concern, however, is how high fares will have to be on such costly metro rail services and whether foreign borrowing will place significant pressure on the country.

Planning State Minister Zonayed Saki said Japan would not be able to build the projects at a lower cost.

He said, “Initiatives have been taken to build capacity so that we can undertake projects such as metro rail ourselves in the future. Flaws are now being found in feasibility studies, designs and cost estimates. However, the Prime Minister has given instructions to ensure that such mistakes do not recur when new projects are taken up.”

The ECNEC approved 12 projects yesterday, Wednesday including seven new projects and five revised ones.

Other approved projects include the development of district highways under the Rajshahi and Chattogram road zones; the introduction of electric traction on the Narayanganj-Dhaka-Joydebpur railway route; construction of a new dual-gauge railway line from Bogura to Sirajganj; establishment of Barishal Cantonment and construction of infrastructure, including accommodation for naval personnel in the Khulna Naval Area; development of the sewerage system in Khulna; improvement of working conditions and social protection for workers in the textile and leather sectors; and development and expansion of the electricity distribution system in the island areas of Monpura.