Road building cost likely to go up by 18pc

FT ONLINE

Per-kilometre road construction cost is likely to increase by 18 per cent in the country due to a new schedule of rates, sources said.

Roads and Highways Department (RHD) has taken the move for making an adjustment with the prices of construction materials with current market prices, they added.

They said RHD has already prepared the new schedule of rates after consulting with all concerned. It found a significant gap in the prices of construction materials with the schedule of rates approved in 2015.

The department prepares the schedule of rates to estimate the project cost according to the quantity and cost of different construction materials.

Sources said though an increase in average cost of per-kilometre road construction was shown at 18 per cent, cost adjustment, in some cases for example, rods and stones, was doubled.

Only the price of bitumen remains stable.

Average cost of land development, pavement and structure also increased significantly.

RHD officials said the latest schedule of rates has been prepared to make it more realistic than the previous schedules. It aims to separate the rates as per zones.

Zone-based separate rates will help the RHD estimate the project cost more accurately as the prices of materials vary from one zone to another.

They said the project cost will now be assessed depending on the prices of construction materials to make it more accurate.

RHD has 10 zonal offices which cover a wide range of areas. Besides, the schedule of rates for island or busy cities like Cox's Bazar would not be same, the officials added.

RHD is taking 'geographical complexities' into consideration while preparing the new schedule of rates, they added.

The Ministry of Road Transport and Bridges formed a committee to review the prices proposed by RHD. Sources said the committee is expected to complete the review within a week.

RHD, the state-owned road infrastructure development agency, constructs regional and national highways in the country.

Though it needs construction materials including sand, stone, cement, rod and bitumen, the prices are compared with different qualities of materials and various layers of roads.

RHD prepared the latest schedule of rates in 2015, four years after the previous rate was announced.

Officials said though there is no hard and fast rule to change the schedule of rate within a specific time, RHD updates its schedule of rate every three to four years.

Before 2015, it updated the schedule of rate in 2011 from the rate in 2008.

The decision has already been taken to adjust the schedule of rates with inflation every year.

According to a World Bank report, Bangladesh spends much higher amounts than India and China on the construction of roads particularly because of time overrun and lack of competitive bidding.

The estimated cost of construction is $ 6.6 million a kilometre of Rangpur-Hatikumrul four-lane highway, $ 7.0m of Dhaka-Sylhet four-lane highway, $ 11.9m of Dhaka-Mawa four-lane highway and $ 2.5m of each of Dhaka-Chittagong and Dhaka-Mymensingh four-lane highways.

But a four-lane highway costs $ 1.1m to $ 1.3m a km in India and $ 1.3m-$ 1.6m in China.