The cost of an infrastructure project implemented largely through a Chinese loan to facilitate fuel oil storage and transport is set to be revised for the third time, planning ministry officials said.

State-owned Eastern Refinery Limited took over the project “Installation of Single Mooring Point with Dual Lines” in Cox’sBazar in November 2015 at a cost of Tk 4,935.96 crore. The project was due to be completed in December 2018.

Out of the cost of the project, Exim Bank of China agreed to extend a loan worth Tk 3,903.22 crore and the rest of Tk 1,032.7 crore was to be raised from local sources.

A loan agreement between Bangladesh and China was only signed in 2017.

The delay in securing a loan led ERL to request an increase in the cost of the project to Tk 5426.26 crore, which was approved. The duration of the project was then extended until 2019.

In its second revision in July 2020, the cost of the project increased to Tk 6,568. crore and his term was extended until 2022.

Speaking to New Age on Sunday, ERL chief executive Md Lokman said they could not complete the project in the second deadline due to the Covid pandemic.

Once the project is completed, it will help the company unload imported fuel oils faster, he said, adding that the time would be reduced to 48 hours from the current 11 days.

The Managing Director of ERL said he has submitted a proposal to the planning commission to extend the duration of the project for another year until June 2023 and increase its cost from Tk 556.34 crore to 7,124, 63 crore Tk.

He hopes that the main components of the project will be completed by next August, as more than 78% of the project is complete.

Under the ERL’s proposal, the Exim Bank of China loan will now amount to Tk 4,688.26 crore from the original Tk 3,903.22 crore, while the rest of the Tk 2,435.86 Tk crore of the original Tk 1,032.7 crore is believed to come from local sources.

The Chinese loan bears an interest of 2%. Bangladesh will repay the loan in 20 years with a grace period of five years. The ERL chief executive said the five-year pardon would end in April 2023.

Planning commission officials said the executive committee of the national economic council is due to consider the BRE proposals at its meeting on Tuesday.

They added that the number of proposals reviewed under the annual development program was increasing.

In October, ECNEC approved three proposals, increasing the cost of the 1,200 MW coal-fired Matarbari power plant by 44.10% to Tk 51,854.88 crore from Tk 35,984.46 crore among them.

The project is financed by a loan from Japan.

Former Bangladesh Bank Governor Salehuddin Ahmed noted that the time and cost overrun was not a good sign as it related to economic returns from projects and repayment of debt to foreign borrowers.

Referring to the current debt situation in Sri Lanka, he said the government should be more careful in implementing development projects with short-term foreign loans.

The construction of the Khulna-Mongla railway line project implemented with a loan from the Exim Bank of India in 2010 is not yet complete despite the repeated extension of time and cost.

The initial project cost of Tk 1,721 crore has risen to Tk 4,261 crore.

In January 2021, the project ‘Widening Approach Road and Developing Other Infrastructure of Bangabandhu Sheikh Mujib Safari Park, Gazipur’ under the Forest Department was revised for the third time, increasing its cost to 239 .04 crore Tk compared to the original Tk 70 crore.

Former director general of development studies at the Bangladesh Institute, Mustafa K Mujeri, said multiple factors, including flawed design, inefficient implementing agencies and unrealistic time projections, were at the root of the problem. origin of this cost revision.

He noted that the combined efforts of the government were imperative to overcome the cost and time overruns of the development project.

More than 24% of investment projects under the current ADP worth Tk 2,25,324 crore have already been reviewed one to three times, according to a report by local think tank Center for Policy Dialogue in June 2021.

The number of projects reviewed increased to 326 in the current FY22 from 285 in FY21.