Bangladesh
2 years ago

Ashuganj port rail-link project: BIWTA to use govt fund instead of Indian LoC

Revised bid to be placed before ECNEC today

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The Bangladesh Inland Water Transport Authority (BIWTA) has denied Indian line of credit (LoC) for installing a railway connection with the Ashuganj river port, insiders said on Monday.

Instead, the entity has decided to complete the rail-link project after getting funds from the government's internal resources, they also said.

The railway connection work was earmarked for implementation with the Indian LoC under the Ashuganj port development project.

"We have revised our project. Now we will set up the railway connection between the river port and the nearby railway line with funds from the government. We will not execute the project with the Indian LoC," said a senior official of the Ministry of Shipping (MoS).

The state-owned BIWTA has sought revision of its ongoing "Setting up of Ashuganj inland container terminal at the port project" by changing the funding arrangement for the railway connection work.

In the revised development project proposal (DPP), the BIWTA has escalated the cost by Tk 4.58 billion to Tk 17.51 billion - from the current estimation of Tk 12.93 billion.

The agency has also sought two more years up to December 2024 for completing the project - from the current deadline of December 2022.

Of the newly proposed Tk 17.51 billion cost, Tk 10.18 billion would come from the government's internal resources, and the rest Tk 7.33 billion from the Indian LoC as project aid.

The revised proposal is likely to be placed before the Executive Committee of the National Economic Council (ECNEC) today (Tuesday).

Project insiders said although the project was approved in 2018, its physical work is yet to start.

"Only land acquisition, drawing and design of port development work, and tender invitation for the physical works have been done so far. After selecting the contractor, the physical works will start soon," said a senior BIWTA official.

Cost escalation based on fresh drawing and design, increase in estimated cost for terminal infrastructure, boosting scope of works of some components, merger of some packages, changing funding arrangement for railway connection work, and cost escalation for consultants are the key reasons for revising the project, he noted.

"After getting revision of the project from the ECNEC, we will complete the Ashuganj river port development works by December 2024," he added.

Some key works like the PGCB's tower shifting, change in rate schedule, and delay in getting final drawing and design from the consultants are the reasons behind the delay in the project's implementation, another MoS official told the FE.

"We're facing some complexities regarding the terms and conditions, imposed by the Indian government for borrowing from its LoC. So, it is really a problem for smooth completion of the works in time," he added.

A Planning Commission official said it is painful for the country that a river port development project has not even started in three and a half years. Rather its time and cost have escalated.

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