Metro Rail Costs Surge in Dhaka, Raising Concerns

The estimated cost of building two new metro rail lines in Dhaka has increased to more than double the per-kilometer cost of the existing Uttara–Motijheel route. While the earlier line cost around Tk 1,574 crore per kilometer, the new projects are projected at about Tk 3,618 crore per kilometer.
The two proposed routes include one from Kamalapur to the airport and another from Hemayetpur to Bhatara via Mirpur and Gulshan. Both lines will include a mix of elevated and underground sections.
Total Cost Nears Tk 184,500 Crore
Combined, the projects are expected to cost approximately Tk 1.84 lakh crore, raising serious concerns about financial sustainability. Officials warn that such high costs could increase passenger fares and add to the country’s debt burden. The government has not yet made a final decision on proceeding with the projects.
Limited Competition Driving Costs Up
Experts and officials believe that restricted competition in the bidding process is a major factor behind the rising costs. Due to financing conditions set by Japan’s development agency, Japanese contractors are dominating the bidding process, limiting broader competition.
Officials from Dhaka Mass Transit Company Limited (DMTCL) also suspect possible collusion among contractors, as only a small number of firms submitted final bids in key project packages.
Costs Far Exceed Initial Estimates
MRT Line-1 was initially estimated at Tk 52,561 crore but may now reach Tk 96,500 crore.
MRT Line-5 (North) was projected at Tk 41,238 crore but could rise to Tk 88,000 crore.
In some cases, contractor bids were several times higher than government estimates, leading authorities to cancel certain tenders.
Economic Risks and Future Uncertainty
Analysts warn that proceeding with such expensive mega projects without competitive bidding could pose serious economic risks. Some have cautioned that excessive spending on infrastructure could strain the country’s finances.
Officials are now considering revising project proposals, including changes to loan conditions, to encourage wider competition and reduce costs. However, the newly formed government has yet to announce its final decision.
Alternative Ideas Emerging
There are also discussions about introducing monorail systems in Dhaka as a more cost-effective alternative. While cheaper to build, monorails typically carry fewer passengers than metro systems.