Govt, JICA meet to break MRT-1 deadlock

The government is set to hold a crucial meeting with Japanese development partner to try to resolve a long-running dispute that has stalled work on Bangladesh's first underground metro rail line.

Officials hope the talks will clear a path for construction of the MRT-1 line between Airport and Kamalapur after years of delays.

The discussions come amid a deep disagreement over unusually high bidding prices for key construction packages, with the government seeking to cancel and re-tender some contracts while the Japanese lender warns that doing so could breach loan conditions and cause further delays.

The government will sit with Japan International Cooperation Agency (JICA) on Tuesday to resolve obstacles to the project works, officials said on Saturday.

The bidding price dispute between the Dhaka Mass Transit Company Limited (DMTCL) and JICA has halted the project works for years, they said.

According to sources, the DMTCL wants to cancel the tender for what it considers abnormally high bidding prices for the construction works of the MRT-1 line between Airport and Kamlapur. However, JICA has not allowed the DMTCL to do so.

The Economic Relations Division (ERD) has organised the pivotal meeting with JICA, where the project-implementing agency DMTCL and its line ministry, the Ministry of Road Transport and Bridges, will attend.

"We have called the meeting to resolve the crisis. Since the bidding cost is abnormally high, it needs a settlement to move ahead with the stalled MRT-1 construction works," said a senior ERD official.

The discussion will centre on the controversial request to cancel and re-tender two major contract packages, CP-02 and CP-05, following an "abnormal" cost hike proposed by Japanese bidders.

The DMTCL claimed that as JICA, the fund provider of the MRT-1 project, has been denying the cancellation request for the costly bids, the MRT-1 construction works have remained stalled for years.

According to DMTCL, it has consistently argued that accepting these bids would be "neither prudent nor legally defensible", given that the total project cost could soar towards Tk 960 billion, nearly double the initial Tk 525.61 billion estimate.

For months, DMTCL has been locked in a "tug-of-war" with JICA. While the Bangladeshi side seeks to cancel the current bids and invite fresh international competition to lower costs, JICA has previously expressed "disappointment" and rejected such requests.

JICA's stance is rooted in its procurement guidelines, asserting that the evaluation process was fair and that the bids reflect current market dynamics, including high underground construction risks and global inflation.

JICA warned that a cancellation would not only breach the loan agreement but also delay the project by at least 18 to 24 months, sources said.

Ministry officials said the bidding prices for almost all 12 packages of the MRT-1 construction project are high.

However, they requested JICA to allow cancellation of two bids for CP-02 and CP-05, as those bidding prices are almost double the official estimates.

In the CP-02 package (Depot Civil and Buildings), Japanese bidders reportedly quoted costs nearly 172 per cent higher than the government's original estimate, while the price for the CP-05 package (mainline and stations from the transition point at airport to Nadda) was about 26 per cent higher.

According to government sources, the lowest bidding price for the CP-02 package (Depot Civil and Building Works at Rupganj) was Tk 33.53 billion, 172 per cent higher than the estimated Tk 12.30 billion.

For the CP-05 package, the lowest bidding price was Tk 50.55 billion, 26 per cent higher than the Tk 40.12 billion official estimate, the source added.

A senior official of the Ministry of Road Transport and Bridges said the ERD is expected to present these specific figures to JICA to justify the cancellation and re-tendering of the packages.

DMTCL's stance is that these costs are "neither prudent nor legally defensible" under existing project benchmarks, he added.

As a result, the project may now face further delays, with the completion deadline potentially shifting to 2030 from the current target of 2026.

According to government sources, the Japanese contractors Tokyu Construction and Mitsui & Co. have been shortlisted for the CP-02 package.

Meanwhile, the Japan-Bangladesh joint venture comprising Tekken Corporation, Abdul Monem Ltd and Abenikko has been shortlisted for the CP-05 package covering tunnels and stations from Airport to Nadda.