ADB Concerned About $20 Billion Investment in Bangladesh

ADB Concerned About $20 Billion Investment in Bangladesh

Asian Development Bank (ADB) is highly interested to invest $20 billion in Bangladeshi road and railway projects. However, this manila based multilateral lander has raised some concerns over the timely implementation of the schemes on a project portfolio report submitted to the government in September. Although the report didn’t mention how much time it will take to disburse the full payment, ADB will disburse around $4.16 billion in the next three years in 16 projects. The projects include Laksam-Chattogram Dual Gauge Railway Project ($300 million); Dhaka-Sylhet Corridor Road Investment Project ($500 million); Dhaka Northwest Corridor Road Project-Phase 3 ($400 million); Line 5, Southern route of Dhaka Mass Rapid Transit Development Project ($300 million); Phase 1 of Dhaka-Cumilla Chord-line Project ($300 million); Phase 1 of Dhaka-South Corridor Road ($400 million); Dhaka-Chattagram PPP Highway Project ($400 million); and Phase 2 of Dhaka Northwest Corridor Road Project ($200 million).

It was also mentioned in the report that Bangladeshi project proposals lack detailed designs including survey and investigation and the scope changes significantly, so the time and cost – both exceed the primary budget allocation. 

The report brought attention to some previous transport sector projects, where appointing a contractor took almost 20 months after the project was approved and the delay occurred due to poorly prepared bidding documents. Moreover, land acquisition and resettlement is another major reason for transport sector projects taking longer times than expectations. Also, from preparing, revising and submitting the projects to the line ministry to getting approval from the Executive Committee of the National Economic Council (ECNEC) often slows down the project. 

Bangladesh has been on a good relation with ADB since the joining. A decade ago, ADB’s financing on the Bangladesh transport sector was around $741 million, which has risen to almost $3 billion in August, 2022. 

Since the report has mentioned some shortcomings from the borrower side, ADB recommends Bangladesh to strengthen the reviewing capacity of the project implementing agencies. Also, the experts should improve the design quality and become more responsible about finishing the project on time so that the cost may remain as proposed. Also, PMUs and PIUs dedicated management teams who have prior experience working with ADB in areas like procurement, financial management and FIDIC contracts – should be included in the projects. This way, the project readiness facility to improve design, procurement readiness and establishment of the management team will have a better understanding about the project which will help to execute it in due time. 

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