Dhaka Metro Rail Costs Set to Double as Technical Committee Endorses Revised Budget Proposals

The projected cost for the construction of two major metro rail lines in Dhaka is set to more than double, rising from an initial estimate of 93.8 billion BDT to a revised proposal of 213.985 billion BDT. The Dhaka Mass Transit Company Limited (DMTCL) has submitted the revised budget to the Planning Commission, following an expert committee’s assessment that the increased expenditure is justified.

The projects, MRT Line-1 and MRT Line-5 (Northern Route), were initiated in 2019. MRT Line-1 involves the construction of a subway system from Kamalapur to the airport, alongside an elevated section stretching from Nadda to Purbachal. MRT Line-5 (Northern Route) is designed to connect Savar to Bhatara via Gabtoli, Mirpur, and Gulshan through a combination of subway and elevated tracks.

The surge in costs is attributed to a combination of design revisions, currency devaluation, rising material prices, and project implementation delays. According to official data, the exchange rate for the US dollar was estimated at 84.50 BDT in 2019, but it has been adjusted to approximately 122 BDT in the new 2025-based projections. Additional factors include increased VAT and tax liabilities, land acquisition expenses, and rising costs for fuel, cement, and steel.

In May, a seven-member technical committee led by former Bangladesh University of Engineering and Technology (BUET) professor Shamim Z. Basunia was formed to review the financial feasibility of the projects. In its July report, the committee concluded that the cost increase was logical. Professor Basunia emphasized that inflation, the 38 percent devaluation of the Taka, and necessary design adjustments made the higher budget inevitable. He noted that delaying the projects further would likely lead to even higher costs.

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The funding for these projects is provided by the Japan International Cooperation Agency (JICA). Critics, including transport experts, point to a lack of competitive bidding as a primary driver of the high costs. Requirements integrated into the tender process effectively limit participation to Japanese firms, which analysts argue restricts price negotiation. Professor Shamsul Hoque of BUET stated that costs could be significantly reduced if the government negotiated more flexible loan terms with the donor agency to encourage open, international competition.

Under the revised proposal, the cost for MRT Line-1 has climbed from 52.561 billion BDT to 120.794 billion BDT, with the per-kilometer cost expected to reach 3.866 billion BDT. Similarly, the cost for MRT Line-5 (Northern Route) has risen from 41.239 billion BDT to 93.191 billion BDT, equating to approximately 4.660 billion BDT per kilometer.

Minister of Road Transport and Bridges Sheikh Rabiul Alam defended the necessity of the infrastructure, stating that the expansion is critical for the future of Dhaka. The Planning Commission is expected to conduct an evaluation meeting to discuss the rationale behind the budget increase before granting final approval.