Advance procurement for MRT Line-5 starts to minimise project delays

The Asian Development Bank (ADB), as the main development partner for the Tk54,618 crore mega project, will provide a loan of $2.36 billion while South Korea will lend $1.35 billion, as official documents show.

The Dhaka Mass Transit Company Limited (DMTCL) will begin the procurement process for the much-anticipated southern extension project of Dhaka’s metro rail system, MRT Line-5 (Southern Route), in advance to minimise potential delays in construction over securing foreign funding.

The Asian Development Bank (ADB), as the main development partner for the Tk54,618 crore mega project, will provide a loan of $2.36 billion while South Korea will lend $1.35 billion, as official documents show.

Export-Import Bank of Korea will only negotiate the loans after conducting a feasibility study and evaluating the design of the system packages through consultants appointed by it for its designated package, DMTCL officials said. 

The Road Transport and Highways Division and the ADB have already approved the advance procurement process for the construction of the extension of the metro rail line running 13.10 kilometres underground from Gabtoli to Aftabnagar and 4.10 kilometres elevated from Aftabnagar to Dasherkandi.

According to DMTCL officials, procurement work for development projects typically begins after the main project is approved. The procurement starts with the appointment of a construction supervision consultant, which usually takes one to two years. Due to the advance procurement for the MRT-5 southern project, at least one year will be saved after the project’s approval.

The initial goal was to begin implementation of the project in January 2024, said the officials. If the process of appointing the supervision consultant does not start now, the metro rail work cannot be completed by the 2030 scheduled, they said. This procurement strategy has been adopted for this reason, according to them.

According to the project proposal submitted to the Planning Commission, of the total project cost, Tk39,138 crore will be foreign loans.

As the DMTC officials put it, initially it was decided that only the ADB would provide loans for the project. Later, Korea joined in. It was decided that the ADB would arrange finances for consultancy and civil packages while Korea would provide loans as a co-financer for system packages.

Mohammad Emdad Ullah Mian, a member of the Physical Infrastructure Division of the Planning Commission, told TBS that project restructuring was discussed in an evaluation committee meeting held on 23 April.

Decisions will be made regarding the final approval of the project, considering the finalisation of the source of foreign loans for the restructured project proposal, he said.

Emdad further said, “Since the ADB, an accredited institution, has reviewed and designed the project, it is unlikely that the other development partner will take much time for scrutiny. Therefore, the matter of project financing will be resolved quickly in this regard.”

He said that the MRT-5 southern extension project funded by the ADB is ongoing. Due to the approval process of the main project, the deadline for the technical assistance project has been extended until June 2025 to ensure that the construction schedule of the project is not disrupted, Emdad said. 

“Many tasks of the main project will now be undertaken under the technical assistance project. Besides, to ensure that the main construction work is not hindered, the process of advance procurement is also being started,” he said.

A DMTCL official on condition of anonymity told TBS, “The project approval will not be stalled as a memorandum of understanding has already been signed with Korea.” 

He said they hope that Korea will finish its feasibility study and evaluation of the design of the system packages within six months.

Bidding document preparation 72% completed

Under the ongoing ADB-funded technical assistance project, surveys in the first phase and engineering design in the second phase have now been completed, said the officials. In continuation of the process, bidding documents for various aspects of the construction work are being prepared, of which 72% have already been completed, they said.

Under the technical assistance project, preparation of bidding documents, preliminary tendering and evaluation activities, interface management planning and procurement process for construction supervision consultants have been initiated, said the officials.

However, since the bidding documents for the Export-Import Bank of Korea packages will be prepared under the technical assistance project, the ongoing project’s duration has been extended, they said.