Abnormal cost of a road project

The Roads and Highways Department (RHD), a key public sector development agency, is found to be unusually extravagant in fixing costs of its development projects, particularly that of major road upgrades. Despite widespread criticism, the department has undertaken a good number cost-intensive road projects in recent years. Even questions raised by the Planning Commission (PC) about high costs could not dissuade it from tagging high costs to road projects. The Dhaka-Sylhet four-lane Highway project is the latest example.

The RHD has estimated the total cost involved in building the 214-kilometre highway at about Tk.157 billion that includes the land acquisition cost of Tk.42.75 billion. That puts the per km cost of the project at over Tk.730 million, compared to that of Tk. 208 million in the case of Chittagong four-lane highway project. Going by the allocations sought for a number of segments, it is evident that there exists enough scope to reduce the overall cost of the four-lane project. There are already a few instances of inflated cost estimation by the RHD.

The department has sought Tk.307 million for purchase of vehicles and furniture, Tk. 3.4 billion for staff salary and honorarium, more than Tk. 9.0 billion for training and study tour programmes, Tk.6.5 billion for sign-signal, road-side facilities and incidental costs and another Tk.6.5 billion for some other unimportant expenditures. If not in other areas, informed quarters suspect there could be foul play in vehicle purchase and training programmes. Most major public sector development agencies have the propensity to spend a substantial sum on account of purchase of expensive cars. These vehicles, by design or default, are sent for use by the top notches of the agencies or ministries concerned.

Similarly, the amount Tk.9.0 billion the RHD has sought for training/study tour programmes, including foreign ones, for project officials might sound absurd to many. The RHD has already executed, at least, two identical projects the Dhaka-Chittagong four-lane and Dhaka-Mymensingh four-lane projects. Thus, its officials have acquired enough experience in building major road projects. What they need, is orientation from time to time.

The estimation of cost and the proposals made at latter stages for escalation of the same under different pretexts by most development project executing agencies in the public sector smack of ill motives. There is no denying that cost projections are made taking into account a number of factors, including the probable hike in the cost of construction materials and labour wages. Yet, the government agencies are found to be more interested in creating scope for pilferage and wastage of taxpayers' money invested in development projects. These agencies, if they desire so, can fix cost of projects realistically and leave little scope for wastage of resources.

Volumes have been said and written about weaknesses and mismanagement in the public sector development administration. The government has been implementing many mega projects involving huge costs without removing those weaknesses. It should urgently do something about this to save resources that it finds very difficult to mobilise. 

• Courtesy: The Financial Express /Editorial /Jul 22, 2018