Tuesday, 28 March, 2023

Economic Shock of Russia-Ukraine War

Govt assessing impact on mega projects

The government is reviewing the progress of its mega projects in light of recent economic shocks caused by the Russia-Ukraine war.

A taskforce on fast-track projects held a meeting at the Prime Minister's Office (PMO) on Sunday to assess the impact of inflation, dollar crisis, and other external factors on these projects.

PMO’s Principal Secretary Md Tofazzel Hossain Miah chaired the meeting, said sources at the Economic Relations Division (ERD), which is acting as the secretariat of the taskforce.

The mega projects include Padma bridge, Metro Rail, Rooppur nuclear power plant, Rampal coal power plant, Matarbari coal power plant, Payra deep seaport, Padma rail link project, and Dohazari-Ghundhum rail line project via Cox’s Bazar and Ramu.

The Metro Rail Line-6 project received special attention at the meeting. The taskforce discussed the impact of limited operation from Uttara to Agargaon, remaining work and other issues. The state of execution of previous meeting resolutions and the rise of project cost and time at the eleventh hour were also discussed.

According to meeting sources, the estimated cost of the eight projects is Tk 3,062.69 billion, of which Tk 1,872.93 billion has been spent until December 2022. The projects have seen overall progress of 76.85 percent and an average financial progress of 66.88 percent.           State Minister for Planning Dr Shamsul Alam stated that project progress is good and efforts are being made to ensure that the ongoing financial crisis does not disrupt progress.

If necessary, allocations from other projects will be curtailed to provide funding. The government's highest priority is to resolve any problems that may arise, he noted.

Dr Alam also explained that last-minute cost hikes and time extensions are common in mega projects. For example, he mentioned that the Padma Bridge project's cost and time have risen for river training work, which is important for the safety of the bridge.

According to an IMED report, the Padma Bridge project was opened on June 25, 2022, with 4.2 percent work remaining unfinished. By December 2022, the project had a progress of 94.52 percent with 95.80 percent physical progress. The project deadline is now June 2023.

The Metro Rail project has seen 70 percent physical and 63.10 percent financial progress with Tk 211.19 billion spent. The work is expected to be completed by June 2024. The Uttara-Agargaon segment was opened on December 28, while the Agargaon-Motijheel segment is expected to open by next December.

The Rooppur Nuclear Power Project has seen 53.94 percent physical and 51.52 percent financial progress with Tk 582.70 billion spent. The costliest mega project is expected to be opened by December 2025.

The Padma Rail project has seen 68.50 percent physical and 67.18 percent financial progress with Tk 263.65 billion spent until December 2022. The project deadline is June 2024.

The Maheshkhali-Matarbari Coordinated Infrastructure Development Program, which includes 12 projects, has a June 2026 deadline. By December 2022, the program had seen 70.76 percent overall progress and 56.99 percent financial progress with Tk 295.52 billion spent.

The Rampal Power Plant has seen 90.05 percent physical and 80.62 percent financial progress with Tk 129 billion spent.

Tk 35.87 billion has been spent on the Payra Deep Seaport project, achieving 82 percent financial and 87.75 percent physical progress.

Tk 35.87 billion has been spent against Payra deep seaport project to achieve 82 percent financial project and 87.75 percent physical progress, while the Dhohazari-Cox's Bazar and Ramu-Ghundhum rail line project witnessed 78 percent physical and 40 percent financial progress with Tk 72.16 billion spent.