Over 42pc cost hike along with tenure extension proposed for CMID

The National Board of Revenue (NBR) has managed to utilise only Tk 102.32 million--a mere 0.61 per cent of the total Tk 16.86 billion allocation--for a flagship project designed to modernise the country's customs system and cut international trade processing time by 25 per cent.

As a result, the Internal Resources Division (IRD) has now put forward a proposal for revising the project, seeking a one-year extension along with a cost escalation to Tk 23.98 billion, up by 42.19 per cent from the original outlay.

If approved, the revision would raise the project cost by Tk 7.12 billion, driven by a 74.14 per cent increase in government financing and a 37.62 per cent rise in foreign loan components, official sources said.

The International Development Association (IDA), the World Bank's concessional lending arm, had initially pledged Tk 14.75 billion for the project, which was approved in 2023.

As per the revised proposal, the IDA's contribution is expected to climb to Tk 20.31 billion, it was learnt.

"The IRD had recently forwarded the revised proposal to the Planning Commission (PC) and the Economic Relations Division (ERD), while the commission's Socio-Economic Infrastructure Division has initiated the appraisal process for final approval," said a senior official.

The commission will review the project progress and the implementing agency will be asked to justify the proposed cost escalation, he said.

The NBR initiated the project titled "Customs Modernization and Infrastructure Development (CMID)", aimed at modernizing the customs system by developing cost-efficient, resilient and gender-inclusive infrastructure at key ports and by introducing internationally recognised, risk-based clearance procedures to reduce overall trade costs, revealed the project documents.

The initiative was designed to cut export and import processing time by 25 per cent through streamlined assessments, reduced physical inspections and expanded use of the green channel at the Custom House, Chattogram, it added.

Analysing the proposal it was found that Tk 60.04 million would be reduced from the cost as some of components are set to be dropped from the project.

A senior official of the NBR, familiar with the project, said the revised proposal has sought an additional allocation of over Tk 6.0 billion for construction of residential and administrative buildings. The remaining amount of the cost has been proposed for meeting the cost of some new components of the project, he added.

The aims of the project are to deliver a significant improvement in the efficiency and reliability of customs operations, according to the proposal

Export clearance time-now averaging 11.5 days-and import clearance time of about five days were expected to decline markedly as green-channel clearance rose from zero to 60 per cent and red-channel inspections fell from 25 per cent to 10 per cent.

The project included the construction of modern, green-certified facilities for the Custom House and the Customs, Excise and VAT Training Academy, equipped with advanced laboratories and gender-responsive amenities.

A major component of the project was capacity-building through providing training to 7,000 customs officials through blended learning to sustain long-term reforms.

jahid.rn@gmal.com