Dhaka-Ashulia Expressway Cost Surges Alongside Construction Progress
Graphics: Agamir Somoy
The Dhaka-Ashulia Elevated Expressway, one of Bangladesh's flagship infrastructure projects, is moving ahead with financing from China. However, as construction progresses, the project's cost is rising just as rapidly. The second revised project proposal seeks to increase the budget by Tk 96.80 billion, pushing the total cost up by 55.15% from the original estimate. The proposal also seeks to extend the project deadline by two years, until June 2030.
Project officials say the additional cost stems from several new components. These include a proposed intersection at Baipail, which they say would eliminate traffic congestion at the junction. The revised plan also includes new connections to the airport's Third Terminal and the under-construction MRT Line-1, significantly increasing the overall project cost.
The revised proposal was reviewed at a meeting of the Project Evaluation Committee (PEC) in January. However, six months later, it has yet to be placed before the Executive Committee of the National Economic Council (ECNEC) for approval. Officials remain optimistic that the proposal will be approved at the next ECNEC meeting.
The project involves constructing a nearly 24-kilometer elevated expressway from Kaola in Dhaka through Abdullahpur, Kamarpara, Dhaur, Ashulia, Zirabo, Baipail, and Savar EPZ, ending at Shripur Bus Stand.
Project Director Md. Shafiqul Islam told Agamir Somoy that the newly proposed components were not included in the original feasibility study. He said project implementation later showed that the Baipail intersection and links to the airport and metro rail would be essential to ensure the expressway's full effectiveness and maximize public convenience.
He said the proposal has been submitted to the government for consideration. If the government determines that the additions serve the public interest, it is expected to approve them. He also said there are no problems with the disbursement of Chinese loan funds and that construction is progressing smoothly. He expressed hope that the revised proposal would be approved quickly and presented at the next ECNEC meeting.
According to project documents, the original project cost was estimated at Tk 169.01 billion, including Tk 59.51 billion from the government and Tk 109.50 billion in Chinese loans. The first revision increased the cost to Tk 175.53 billion.
The latest proposal seeks an additional Tk 96.80 billion, raising the total project cost to Tk 272.33 billion.
As of June 2025, the project had spent Tk 117.35 billion. Financial progress stood at 66.86%, while physical implementation reached 52%.
The project was originally scheduled to run from September 2017 to June 2022. However, delays in obtaining approval meant ECNEC did not approve the project until June 16, 2022, prompting an extension to June 2026. The latest proposal seeks another two-year extension.
Sources said the PEC meeting held on January 21 at the Planning Commission reviewed the proposed second revision. During the meeting, a Finance Division representative noted that the revised Development Project Proposal (DPP) includes Tk 19.30 billion for physical work variations, Tk 10.30 billion for VAT and income tax, Tk 5.56 billion for customs duties, and Tk 7.48 billion for land acquisition.
The proposal also seeks an additional Tk 2.60 billion for consultancy services and Tk 5.15 billion for utility relocation.
The Finance Division representative asked whether the proposed increases had been properly verified and whether further cost escalation in those sectors could occur.
In response, Project Director Shafiqul Islam said the proposed increases were based on detailed assessments. However, he said it is impossible at this stage to determine whether additional cost increases will be required in the future.
He also said Bangladesh and China signed a memorandum of understanding on January 22, 2015, for the project under a government-to-government (G2G) arrangement with the Chinese state-designated company China National Machinery Import and Export Corporation (CMC). The commercial agreement was signed on November 29, 2017, followed by a loan agreement with the Export-Import Bank of China (China Exim Bank) on October 26, 2021. The loan became effective the following year, allowing construction to begin formally under the commercial agreement.
The construction period was originally set at five years and two months. However, because the loan agreement was signed four years after the commercial contract, the project deadline was extended to June 2026.
Shafiqul Islam said the second revision was proposed due to several factors, including changes in foreign exchange rates, higher VAT and income tax, increased customs duties, adjustments to price contingencies, higher utility relocation costs, five essential design variations, additional land acquisition, and increased consultancy expenses.
He said exchange rate fluctuations alone increased the project's cost significantly, with the exchange rate rising from Tk 86 per U.S. dollar at the time of planning to Tk 121.75 currently. Other cost components have also increased.
