Poor planning, delays inflate project costs

Poor project planning, arbitrary cuts to initial cost estimates and delays by consultants are among the key reasons government projects in Bangladesh run over budget and fail to deliver value for money, speakers said today.

They made the remarks at a session, titled “Why Projects Fail” at the three-day international conference “Bay of Bengal Conversation 2026”, organised by the Centre for Governance Studies at Pan Pacific Sonargaon Dhaka.

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Ghulam Mohammed Alomgir, founder and chairman of Max Group, said a feasibility study and initial design should form the basis of a development project proposal (DPP), accurately reflecting around 90 percent of the eventual project cost.

“But unfortunately, bureaucrats who have no idea about engineering or what is written in the DPP bluntly ask them to reduce the cost by 15 percent or 20 percent,” he said.

Such cuts, despite engineers’ and employers’ concerns, can create implementation problems, leading to revisions and higher costs, he added.

Delays by consultants are another major problem, particularly in internationally financed projects, where consultants are often paid on a man-month basis.

Some consultants deliberately delay projects to increase their contract value, Alomgir said.

Fahmida Khatun, distinguished fellow at the Centre for Policy Dialogue, said Bangladesh’s limited fiscal space was constraining resource allocation and efficient project implementation.

“The real issue is not finance only. There are several problems which reduce the effectiveness of projects,” she said.

The government faces competing spending demands for infrastructure, health, education and social protection, she added.

Fahmida also warned that Bangladesh’s LDC graduation would make external financing harder to access, forcing the country to borrow increasingly on commercial terms, with higher interest rates and shorter repayment and grace periods.

Sovereign credit ratings will become increasingly important for accessing international markets, she said.

Shamim Z Basunia, emeritus professor of civil engineering at the University of Asia Pacific, stressed the importance of independent technical scrutiny of large infrastructure projects.

Design and cost decisions need rigorous expert review because mistakes at the planning stage can have long-term consequences, he said.

Shamim recently headed a government committee reviewing proposed cost increases for MRT Line-1 and MRT Line-5, both of which are being implemented with JICA funding.

“There was a big hue and cry that the prices of these projects would increase tremendously,” he said, adding that he had submitted the committee’s report to the government within five weeks.

Tanvir Mahmud, senior governance specialist at UNDP Bangladesh, moderated the session.