Deadline extended, no more allowance sought
The Bangladesh Bridge Authority has requested a cost increase and extension for the Dhaka-Ashulia elevated highway project which is being implemented by a Chinese loan containing only five years of grace period.
To this end, the bridge authority last month submitted a proposal to the planning commission asking for Tk 661.72 crore more, which will drive up the cost of the project to Tk 17,553.04 crore from Tk 16,901 .32 crore of Tk originally, according to officials linked to the project.
The BBA requested a four-year extension to June 2026 from June 2022 for the project.
The executive committee of the National Economic Council approved the project in 2017, which was expected to be completed by June this year.
But the delay in finalizing the loan worth Tk 9,192.07 crore from the Exim Bank of China led the BBA to request the first review of the project, project officials said.
The Economic Relations Division signed a loan agreement with EXIM Bank of China in October 2021.
According to ERD officials, the country must repay the loan in 20 years with 2% interest for five years from the first disbursement of the loan.
“Disbursement of the loan will start next month,” project manager Shahabuddin Khan said in an interview with New Age on Tuesday.
He expects the extension and cost increase proposals to be approved by ECNEC at its meeting today (Wednesday).
The government is to start debt servicing of the loan from June 2027, ERD officials said, adding that the project must be completed within the grace period so that the toll collected on the highway can be used. for repayment of the loan.
They noted that many projects implemented with short-term foreign loans were behind schedule.
On May 9, ECNEC approved a two-month extension beyond the loan maturity period for another China-funded project Single Point Mooring with Double Pipe Line.
The deadline for the project has been extended to June 2023, while the five-year grace period of the loan worth Tk 3,903.22 crore will end in April 2023.
The ERD has already projected the country’s external debt repayment to be around $4.02 billion in FY25 from $2.4 billion in the outgoing FY22 following the maturity of foreign loans with short grace periods.
The Standing Committee on Nonconcessional Loans, headed by the Minister of Finance, approved 65 proposals for such loans between 2013 and 2021, according to an ERD report.
The BBA, in its proposal to the planning commission, highlighted several reasons for the escalating cost of the Dhaka Elevated Expressway project.
The reasons include the appreciation of the dollar to Tk 86 from Tk 80 when the project was approved by in 2017.
The project price contingency was proposed at 8% compared to the previous 4%.
In addition, other expenses such as salaries, allowances, fuel oil and vehicle maintenance will increase under the revised proposal.
China National Machinery Import and Export Corporation has been selected by the BBA to build the 24 kilometer highway between Shahjalal International Airport and Nabinagar and Chandra via Ashulia.
The government took on the project to decongest the important corridor between the capital and 30 other northern districts.
It is also expected to reduce traffic congestion in the northern areas of the city, including Savar, Ashulia and EPZ areas, and develop a faster communication system.