The Padma Bridge Rail Link Project cost has been reduced by Tk621.89 crore and the duration extended to June 2025.

According to a senior official of the Planning Commission, the revised budget now stands at around Tk38,625 crore, as proposed by the Ministry of Railways in the second amendment to the Development Project Proposal (DPP). Previously, the project’s budget was Tk39,246.79 crore.

Project Director Md Afzal Hossain said the government funding has been cut by Tk541.31 crore, while the project loan expenditures have been shortened by Tk80.58 crore, easing financial pressure on the government.

The revised DPP was submitted to the Planning Commission on 18 August this year. Approval of the revised DPP is critical to avoid delays in contractor payments, which are due by November 2024.       

Complications have arisen as the availability period for foreign loans ends in November 2024. A significant progress in the project works has been made, but critical tasks such as building Bhanga Junction, TT Para Underpass, and TT Para CTC Building remain incomplete. Political unrest in recent months has further delayed the project work.

Additionally, the project team has planned to use surplus funds for additional works, but the Chinese Exim Bank, the loan provider, is still reviewing the proposal. If the loan availability period is not extended, completing the remaining work and paying for it could become a significant challenge, said sources.

At a recent Project Implementation Committee (PIC) meeting, chaired by Bangladesh Railway Director General Sardar Shahadat Ali, officials concerned emphasised the need to extend the loan availability period to ensure the completion of the project and payment of dues.

Former Planning Division secretary Md Mamun-Al-Rashid expressed concerns, stating, “It is crucial to extend the loan availability period. Otherwise, the unutilised portion of the Chinese loan will remain unused. We must ensure that any extra work funded by the surplus money is genuinely necessary.”

The Padma Bridge Rail Link Project was approved on 3 May 2016, with an initial estimated cost of Tk34,989 crore. After a revision in May 2018, the cost increased to Tk39,247 crore. The project is being implemented on a government-to-government basis with Chinese funding.

China Railway Engineering Group (CREC) is the contractor, and the Exim Bank of China is providing a $2.66 billion loan for the project. The Bangladesh government is funding the remaining portion, with Tk18,210 crore coming from government sources and Tk21,036 crore from Chinese funds.

The project, which began in January 2016, was initially scheduled for completion by July 2024, but the deadline has been extended to June 2025. If the loan availability period is not extended, several tasks under it may remain unfinished.

As of August 2024, Tk33,744.68 crore has been spent, representing 85.98% financial progress and 96% physical completion of the project. However, with the loan availability deadline in November approaching, concerns about completing all the work and clearing the dues by that time have arisen.

According to the PIC meeting sources, progress in some sections is nearing completion. The Dhaka-Mawa section is 97.55% complete, the Mawa-Bhanga section is 99.50% complete, and the Bhanga-Jashore section is 97.62% complete. However, the Bhanga Junction Station Building is only 70% complete, and the TT Para Underpass and CTC Building are 60% and 65% complete, respectively.

Approximately $36.70 million is required to complete the Bhanga Junction Station and TT Para Underpass. So far, $16.90 million has been certified for the work already completed, with an additional $19.80 million estimated for the remaining tasks.

In a virtual meeting of the Economic Relations Division (ERD), the project office, and the Exim Bank of China on 5 September, the bank indicated that it was still reviewing the proposal to use the surplus funds of around $93 million for additional works.

The Exim Bank of China had previously extended the loan availability period by six months, but the ERD has raised concerns about whether further extensions will be granted. Since 96% of the project has been completed, delays could lead to complications in obtaining the necessary approval from the bank.