Awarding projects without tender bears no fruit

Dozens of deals awarded to local and foreign bidders without tenders or through limited tenders in the last ten years did nothing in addressing slow implementation rate and cost overrun of development projects.
Tackling scarcity of foreign funds was cited by project officials as another reason for awarding the deals to overseas bidders mainly from China, Russia and India.
Out of eight major under-construction projects, the government has already made upward revision in the cost of at least four by Tk 9,944.79 crore, pushing up the overall cost of the eight projects to Tk 1,72,927 crore from previous projection of Tk 1,62,979.21 crore.
Updates of four projects awarded to Chinese contractors without tender show that cost of three has already increased by Tk 5,863.79 crore to Tk 55,965.27 crore from initially projected Tk 50101.48 crore until December.
The construction of railway on Padma Bridge and tunnels under the Karnaphuli in Chittagong has already been delayed by more than one year. 
Besides, the construction of Dasherkandi Sewerage Treatment Plant is going to miss the deadline expiring in December while the establishment of water treatment plant at Mawa near the Padma is set to miss its extended deadline of June.
Economists note that the infrastructure shortage will remain because of delayed implementation of the projects. 
In addition, economists including Mirza Azizul Islam, a former adviser to a caretaker government, and executive director of Policy Research Institute Ahsan H Mansur fear debt trap because of high interest rate with less gratuity period attached with the projects without tenders or with limited tenders.
Development projects under the Indian line of credits since 2010 are implemented through limited tender with preference for the Indian contractors.
The LoCs began with $1 billion in 2010 and the second LoC of $2 billion was announced in 2015 and the third LoC of $5 billion in 2016.
According to Economic Relations Division officials, most of the projects under the LoC-II and LoC-III are in planning stage or awaiting signing of loan agreements while major projects under the LoC-I are yet to be completed.
The Khulna-Mongla railway, one of the priority projects of the present government to rejuvenate the country’s second seaport in Mongla, began in 2010 with the deadline of 2018.
But delay in land acquisition and design forced the government to extend the deadline up to June 2020. Meanwhile, the cost of the project was increased by 121 per cent to Tk 3,802 crore from Tk 1,721 crore.
Ramzan Ali, newly appointed project director of Khulna-Mongla railway project, told New Age on January 31 that they achieved 44 per cent progress of the project until November.
He hoped to complete the remaining part of the project in the next one and half years.
Construction of nine-kilometre Fultala-Aranghata, a component of the Khulna-Mongla railway, was started in 2013 but it could not be completed in the last five years despite intensive monitoring by Economic Relations Division, a committee of the Prime Minister’s Office and several rounds of talk of joint monitoring team of Bangladesh and India.
Replying to a question why the implementation rate of projects under LoCs could not be expedited as per expectation, Monowar Ahmed who was appointed ERD secretary in October, said the reasons varied from project by project.
‘Even today (January 31) I find different problems with a LoC project, but those were not identified by the implementing agency’, he said while indicating weakness of the implementing agency. 
Available data from the BR until November show that rehabilitation of the Kulaura-Shahbazpur Section udner LoC-I began in 2012 and was scheduled to be completed in June this year.
Only 12.7 per cent progress of the project was achieved so far.
Progress rate in the construction of third and fourth dual gauge line in Dhaka-Tongi and dual gauge double line in Dhaka-Joydevpur section was only nine per cent as of November after the project with loan from LoC-I started in 2012 and was scheduled to be completed in June this year as per the revised deadline.
The construction of 225 kilometre railway from Dhaka to Jessore through the Padma Bridge was awarded to China Railway Group Limited without any tender in May 2016, but its work could not be started until July 2018 for delay in signing of loan with the Chinese EXIM Bank.
But by this time, the project cost went up by Tk 4,257.94 crore to Tk 39,258.13 crore from Tk 34988.8 crore and the tenure of the project was extended by two years to 2024 from 2022, endorsed by an ECNEC meeting in May 2018.
Padma Bridge railway project director Golam Fakhruddin Ahmed told New Age on January 30 that they were still working on design and alignment of the railway spoiled by the delay in getting loan from China.
Delay in disbursement of loan by China also caused cost hike of constructing tunnels under the Karnaphuli in Chattogram by the China Communication Construction Company Ltd to Tk 9880.40 crore from Tk 8,446.64 crore that was approved by an ECNEC meeting in November.
Dasherkandi Sewerage Treatment Plant project, approved by ECNEC in August 2016, started just in August 2018. 
According to an update by Dhaka WASA until December, only 11 per cent of the Tk 3,317.77 crore project, mostly funded by China and implemented by Hydro China International Engineering Co Ltd, was completed with its deadline expiring in December this year.
Project officials have said they will seek extension of project tenure.
Another WASA project — water treatment plant at Jashaldia of Mawa near the Padma — being implemented by Chinese contractor M/S CMC Engineering Company Limited with loan from China Exim Bank, got the second revision in March 2018.
Still 15 per cent of the Tk 3670.49 project, which began in 2013, will need to be completed by June.
Padma Water Treatment project director Rafiqul Islam said they must complete it by the current deadline as there was no scope for extension of time.
Russia won the single biggest unsolicited project in a fray between China and India in convincing the government about addressing problems in the country’s power sector overburdened with two dozens of rental power plants, mostly awarded to unsolicited local bidders under Speedy Supply of Power and Energy (Special Provision) Act 2010 that was extended thrice to 2021.
It is reported that the debt burden of the country will go up to $65 billion, from the current $24 billion, with the completion of Rooppur power plant in 2024 at a cost of more than $12 billion loan from Russia.
It is also feared that the country’s debt sustainability will face huge pressure due to the repayment of Russian loan in 28 years.
Bangladesh Army has been engaged to implement many development projects awarded by the government without any tender. 
The upgrading of Dhaka-Mawa-Bhanga road is one of them and has already been criticised for its high construction cost — per kilometre of the 55-km highway set at Tk 113.67 crore when it was approved the ECNEC in May 2016.
Additional project director Colonel Tareque on January 31 said they completed major portion of the highway and hoped that finishing touch would be given by the current deadline of June this year.
Answering a question about the proposal by Roads and Highways Division for increasing project cost by around Tk 4,000 crore, he said the proposal was approved by ECNEC at the fag end of the immediate-past five-year tenure of the present government.
Hike in project cost has been attributed by Tareque to addition of new components and significant changes in the design of the highways.
Former cabinet secretary Ali Imam Majumder, also a member of Board of Trustees of the Transparency International Bangladesh, said that cost hike of project on various pretexts, including that of new components, was not acceptable.
Talking to New Age on January 31, he said errant contractors should be penalised for failing to complete the project by deadline to check cost overrun.
On January 23, finance minister AHM Mustafa Kamal said the government would give priority to open tender method instead of direct purchase for transparency in public procurements. 
He noted that procuring public goods and services with direct purchase cost ‘enormously’. ‘And this cost is not cost but wastes,’ he said.

News Courtesy: www.newagebd.net