The Dhaka WASA (DWASA) has failed to start works of Saidabad Water Treatment Plant (WTP) Project Phase-III even in five years, which has escalated its cost by 68 per cent now, insiders said on Tuesday.
The DWASA has not only sought higher funds, but also wanted five more years to complete the project, where three foreign donors are involved, they added.
The agency undertook 'Saidabad Water Treatment Plant Project Phase-III' in July 2015 at a cost of Tk 45.97 billion with a target to complete it by June 2020.
French lender the AFD, European lender the EIB, and Danish development partner the DANIDA had assured of bankrolling the project in 2015.
Failing to start the project's physical works during its stipulated timeline of June 2020, the water supply authority has recently sought its revision, raising the cost to Tk 77.14 billion, a 68 per cent rise from the original estimation.
It has also sought five more years up to June 2025 to complete the project.
An official of the DWASA said they have sought the revision from the Planning Commission (PC), which is now under scrutiny.
A senior official of the PC said the Project Evaluation Committee (PEC) has already scrutinised the project, and recommended its revision for betterment of the country upon some changes in the development project proposal (DPP).
The DWASA Managing Director Taqsem A Khan was not available for comment on the reasons behind the delay.
However, a senior official of the entity, requesting for anonymity, told the FE that they had some complexities with a development partner regarding confirmation of its assured funds.
"We had overcome the complexities last year. Now we have started our project works," he added.
A member at the PC said: "It is a big problem of many government agencies. They undertake projects without confirmation of foreign assistance. It ultimately affects implementation of those projects."
"There is a clear guideline that no project will be approved before confirmation of funds. Fund confirmation is mandatory for project approval."
"But the public bodies sometimes give us so much pressure that we are forced to endorse their schemes only by verifying fund assurance documents."
The DWASA's Saidabad Water Treatment Plant Project Phase-III is under this category, the PC member said on condition of anonymity.
The project got approval by the Executive Committee of the National Economic Council (ECNEC) in September 2015.
The main purpose of the project was to set up a treatment plant with 450 million litres per day (MLD) capacity and a sludge treatment plant beside the Meghna River for supplying drinking water to Dhaka city.
According to the DWASA, the AFD assured of providing US$129.74 million, the EIB $85.74 million (Euro 76 million) and the DANIDA $200 million for setting up the treatment plant before approval of the project in September 2015.
When asked about the delay, an official of the DWASA said complexities regarding the project started, as the EIB expressed its inability to provide the entire assured fund of Euro 76 million due to devaluation of Euro against USD.
In February 2016, the EIB informed the DWASA that it would provide only half of its assured funds, he also said.
Then the ERD requested German donor the Kfw for funding the project as the co-financer instead of the EIB. The Kfw agreed to provide Euro 90 million in December 2016.
Later, ambassadors of the four lender countries expressed their reservation in funding the project, citing dissatisfaction over the Meghna's polluted water, the DWASA official added.
"It created another obstacle. The local government minister, after a series of meetings, assured the donor countries that the government will work to check pollution of the Meghna River. Then the three donors agreed to fund the project, and confirmed their loans in 2018 and 2019."
"Now we are ready to start the works in full swing. But we need the proposed revision from the PC."
"Since we have lost five years, we need five more years. Besides, prices of construction materials and machinery were estimated five years ago. Now their prices have increased. So, we need 68 per cent higher fund to complete the project," he added.
Another senior official of the PC said the DWASA should come with its project only after getting confirmation from donors.
"Now who will compensate the inflated project cost? The beneficiaries have not got supply of their drinking water in time, and the country will need to spend higher volume of hard-earned money for it," he noted.