The newly elected government has decided to proceed with the Japan International Cooperation Agency-supported MRT-1 line-construction project, although the lender has not agreed to cancel the Japanese tenders despite higher bidding prices, officials said on Friday.
Despite requests from Dhaka Mass Transit Company Limited (DMTCL) for a review, the Japan International Cooperation Agency (JICA) in a meeting last week in Dhaka decided against cancelling the high-cost-involved two bids for two separate packages of Bangladesh's first underground metro-rail project, they said.
However, JICA agreed to help DMTCL reassess other bids for nine packages for the MRT-1 construction project from Airport to Kamalapur, they said.
During the last interim government, the state-run DMTCL sought cancellation of the unusually-high-cost bids for the CP-02 and CP-05 packages of the 20km metro rail line from Airport to Kamalapur Railway Station.
Under the management of the Economic Relations Division (ERD), DMTCL and its line ministry sat with JICA last week to request JICA to cancel the bids for CP-02 and CP-05 and settle the struggling MRT-1 project, halted for more than one and a half years, said ERD officials.
According to sources, DMTCL wanted to cancel the tender for the abnormally high bidding prices for the construction works of the CP-02 and CP-05 packages of the MRT-1 line.
But JICA did not agree, said officials.
JICA opined that since both the bids were approved nearly two years back by the then Sheikh Hasina government, now it is impossible to cancel the bids, shortlisted considering the Bangladesh government's and as well as JICA's procurement rules.
It also said if the tender is shelved after two years, the fresh tender would be even costlier than the existing one of the metro rail construction works, he added.
On the other hand, DMTCL has requested JICA to help revisit all the tenders submitted by the contractors for the rest of the nine packages for the MRT-1 project as their quoted price are also higher than the official estimation.
"JICA has agreed to help us, and now we will reassess the bids. If needed, we will also sit with the shortlisted bidders aimed at reducing their quoted prices," said a DMTCL official.
A Roads and Highways Division official said, "The tenders for all the packages were floated at least three years ago and shortlisted about two years back. If we go for retendering, the fresh prices could be higher than the current bidding prices. So, it is better to proceed with the ongoing bids but have to be renegotiated."
"Now, we are expecting that JICA will help us revisit the tenders and reduce cost quoting prices in the nine other packages," he added.
DMTCL has been consistently arguing that accepting these bids would be "neither prudent nor legally defensible," given that the total project cost could soar to some Tk 960 billion, nearly double the initial Tk 525.61 billion estimate.
For months, DMTCL has been locked in a tug of war with JICA over the bids.
While the Bangladeshi side seeks to cancel the current bids and invite fresh international competition to lower costs, JICA previously expressed "disappointment" and rejected such requests.
JICA warned that a cancellation would not only breach the loan agreement but also delay the project by at least 18 to 24 months and also enhance the cost afresh, sources said.
Ministry officials said the bidding prices of almost all the 12 packages of the MRT-1 construction project are high.
In the CP-02 (Depot Civil & Buildings), Japanese bidders reportedly quoted costs nearly 172 per cent higher than the government's original estimates while some 26 per cent for the CP-05 package (mainline & stations from transition point Airport to Nadda).
According to government sources, the lowest bidding price for the CP-02 (depot civil & building works in Rupganj) package was Tk 33.53 billion, 172 per cent higher than Tk 12.30 billion.
For the CP-05 package, the lowest bidding price was Tk 50.55 billion, 26 per cent higher than Tk 40.12 billion official estimation, the source added.
Meanwhile, the DMTCL official said the project would be delayed now and the completion deadline could be shifted to 2030 from the current deadline of 2026.
According to government sources, the Japanese contractor Tokyu Construction and Mitsui & Co has been shortlisted for the CP-02 package.
The Japan-Bangladesh joint-venture company - Tekken Corporation, Abdul Monem Ltd, and Abenikko - has been shortlisted for the CP-05 package (tunnel & stations from Airport to Nadda).
