Buildings to eat up highest 16.10pc funds in ADP

Constructing residential and non-residential buildings alone costs 16.10 per cent of the funds in the upcoming development budget as the interim government has made the highest allocation for this purpose, insiders said Friday.

Such penchant for buildings is evident from a project proposed in advance for the next fiscal year. Construction of buildings would eat up around 56 per cent of a Tk 4.46-billion project proposed by Road Transport Highways Division (RTHD) to curb pollution by removing old and obsolete vehicles from roads.

Out of the Tk 2.30-trillion Annual Development Programme (ADP) for the fiscal year (FY) 2025-26, a total sum of Tk 370.38 billion, 16.10 per cent of the outlay, has been earmarked for such constructions. The ADP was approved by the National Economic Council early May.

Planning Commission (PC) officials said the funds would be utilised for constructing residential buildings, office buildings, and some other buildings relevant to government works.

Economists say the massive budget allocation for infrastructure, especially for the residential building construction, would affect the much-needed development of the country's health and education sectors.

The socioeconomic sectors, especially the health and education sectors, have always got lower priority from all the political governments despite poor human resources in Bangladesh.

Out of the total outlay, the government has provided Tk 280.16 billion, or 12.18 per cent of the Tk 2.30-trillion ADP in the next fiscal, for constructing non-residential buildings, the PC officials said.

Besides, they added, Tk 90.21 billion, 3.92 per cent of the next ADP allocation, has been allocated for constructing the residential buildings.

Meanwhile, the interim government allocated the second-highest amount of Tk 173.58 billion, 7.55 per cent of the total, for road-construction works for the next fiscal year.

Some Tk 160.73 billion or 6.99 per cent of the total ADP outlay has been kept aside for purchasing electrical equipment under the power sector, the PC data showed.

A total of Tk 91.16 billion or 3.96 per cent of the total ADB outlay has been provided for constructing village roads.

Meanwhile, the government allocated Tk 285.57 billion, 12.42 per cent, in the education sector and Tk 181.48 billion or 7.89 per cent in the health sector out of the ADP outlay.

The PC officials said most of the allocated funds in the health and education sectors would be spent on building construction.

The FE has tried to get comment of Planning Secretary Iqbal Abduallah Harun repeatedly, but couldn't reach him by the phone and messages.

"When the country is facing fiscal pressure, low revenue base, lower foreign-aid inflow and lack of governance in project management, the higher-spending proposal for unproductive sector like building construction is worrying and surprising, too," says Dr Masrur Reaz, a young economist in Bangladesh.

"You know that the investment in building construction has low economic and financial returns," he adds.

He suggests this interim government should invest more in health and education improvement aimed at human-capital development.

"Except some absolutely critical buildings for providing public services, the government should not go for allocating the public tax money to this area," the economist says.

"This interim government could set a record in public fund expenditure. But they have followed the footprint of the previous political governments. It is not expected to the people," says Economics professor Dr Selim Raihan of Dhaka University.

"If this government can change the pattern of the public fund expenditures and gives more allocations for human-capital development rather than higher funds for infrastructure development, the next political governments cannot change that pattern easily," he notes.

"So, we have missed the great opportunity for the public fund management and quality budget expenditures," he adds.

In the proposed Road Transport and Highways Division project titled 'Bangladesh Clean Air Project (BCAP) - Phase 1: Component 2.1 (Vehicle Control)', around Tk 353.7 million-nearly 8.0 per cent of the total project cost--has been proposed for consultancy services.

The RTHD submitted the proposal by outlining a financing plan of Tk 4.34 billion from a World Bank loan and the remaining Tk 120.6 million from government exchequer.

Bangladesh Road Transport Authority (BRTA) will implement the project from July next year, with completion targeted by June 2030, subject to approval by the Executive Committee of the National Economic Council (Ecnec).

The physical infrastructures division of the planning commission recently conducted a meeting of the Project Evaluation Committee (PEC) to assess the proposal, said an official concerned.

He said the PEC sought justification for the high cost estimates for construction and consultancy, and returned the proposal with recommendations for revision.

The primary objective of the project is to reduce greenhouse gas (GHG) emissions and air pollution from the transport sector--one of the major contributors to environmental degradation--reveals the project document.

To achieve this end, the project seeks to strengthen institutional, policy, and regulatory framework necessary for effective emissions control. It also aims to reduce emissions through the implementation of targeted interventions, including the establishment of a National Vehicle Inspection Centre (VIC) "to enhance enforcement of vehicle-inspection standards".

Additionally, the project will facilitate the removal of old, unsafe, and high-emission vehicles from the roads, thereby improving public health and supporting national climate goals.

The main activities under the project include establishing seven Driver and Vehicle Inspection Centres (DICs) with dedicated five-storey buildings, procuring 20 mobile vehicle- emission-testing units and five mobile DICs, and building the capacity of 400 BRTA staff members through training and skills upgrade.

Analysing the proposal it has been found that the RTHD proposes allocation of Tk 910 million for procuring seven VIC equipment units, Tk 240 million for 20 mobile emission-testing units, Tk 90 million for five mobile VICs, and another Tk 20 million for additional mobile emission-testing units.

In total, around Tk 1.26 billion-approximately 28 per cent of the total project cost-has been earmarked for emission-control components.

The officials from the Economic Relations Division (ERD) said the World Bank committed to providing loans worth $300 million for Bangladesh Clean Air Project (BCAP). The proposed vehicle emission-control project is a component of the BCAP.

The project documents reveal that BRTA has five VICs currently, of which only one VIC in Dhaka in operational and BRTA also lacks technical skilled manpower to operate the VICs.

The demand for vehicle inspections significantly exceeds the current ability to inspect estimated 6.2 million vehicles in Bangladesh.

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