Padma Bridge cost escalates by Tk 50b before construction begins
Beijing cuts credit by 15pc, Dhaka has to spend higher
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The estimated cost of Padma rail-link project has been revised upward by Tk 50 billion before start of construction of railway infrastructure in one and a half years now.
The overall cost of the project has mainly gone up for paying three times higher for land acquisition.
Meanwhile, sources said, the Bangladesh Railway (BR) had already revised the development-project proposal (DPP) following a hike in government share in the total expenditure on the project.
China has cut its contribution to the project by 15 per cent.
They said the Chinese government will now provide 85 per cent of the project cost as preferential buyer's credit against earlier commitment of cent-per cent funding with relatively soft loans in the original DPP.
"Due to decrease in the Chinese loan, the government part of the expenditure in the project is likely to go up significantly," said one source.
According to the proposed revised DPP, the Padma Rail Link project cost has been assessed to be Tk 400.08 billion, up from Tk 349.88 billion in the original costing.
Project assistance has been shown Tk 210 billion which is Tk 37 billion less than in the original DPP. The government will have to provide Tk 190.43 billion against Tk 102 billion estimated earlier.
Sources said in the original DPP, no payment was shown for getting lands of Roads and Highways Department and Bangladesh Bridge Authority. But now the project will also need the lands of these government agencies along with the 1770 acres of private land.
According to the original DPP, approved in 2016, the project was supposed to complete 18.7 per cent physical work spending around Tk 65 billion until January last.
A commercial contract signed in August 2016 with the Chinese company was worth US$ 3.4 billion following assurances from Chinese government to fully bankroll the Padma rail link project.
But the BR authorities couldn't start the project work failing to sign loan contract with Chinese Exim Bank until now.