A government audit has identified alleged financial irregularities amounting to Tk 13,361.52 crore in the Padma Bridge Rail Link Project, one of the country’s largest infrastructure projects. The project cost increased from around Tk 35,000 crore to Tk 39,000 crore, while the audit found allegations of additional expenditure beyond the original contract, overpayment for work actually carried out, and payments for substandard work.
A special government audit raised 20 objections involving the alleged financial irregularities. It recommended recovering excess payments from contractors and taking action against those responsible. Mohammad Afzal Hossain was the project director during the period when the alleged irregularities took place. He is currently serving as director general (DG) of Bangladesh Railway.
The findings emerged from an analysis of the government audit report, relevant official documents and information from several sources involved with the project. The audit was conducted from January 1 to March 20 last year.
Less Work, Full Payment
One of the major audit objections concerns the construction of the Dhaka-Jashore railway line. According to the report, the average height of the railway embankment was initially set at 7.3 metres in the original design. Following a subsequent survey, however, the height was reduced to 5.6 metres, significantly reducing the volume of earth filling and other related works.
Despite the reduction in the amount of work, the contractor was allegedly paid 100 percent of the amount specified in the Bill of Quantities (BoQ). The audit estimated that this resulted in an alleged excess payment of Tk 2,130.42 crore. It recommended recovering the amount from the contractor and depositing it into the government treasury.
The project authorities, however, claimed that payments were made in US dollars in accordance with the contract and that no excess amount had been paid. The audit authority did not accept this explanation.
Allegation of Excess Rail Imports
Another audit objection concerns the import of 2,855 tonnes of UIC-60 rail beyond the project’s requirements. According to the audit, the additional import resulted in an extra expenditure of Tk 12.51 crore in customs duties, VAT and other taxes.
The audit also raised allegations of Tk 216.79 crore being paid despite the use of less granular sand than specified, Tk 728.04 crore being spent after increasing the BoQ in violation of the turnkey (EPC) contract conditions, and Tk 519.91 crore in financial loss due to payments for locally sourced materials being made in US dollars instead of Bangladeshi taka.
Another allegation concerns the signing of a contract at a price 17 percent higher than the estimated cost by classifying the project as “specialised work.” The alleged financial loss in this case was estimated at Tk 3,606.88 crore.
Various Other Irregularities
The audit report also alleged that Tk 1,011.19 crore was paid in excess by showing more work than the progress reported by the consulting firm. Other allegations include an additional grant of Tk 171.97 crore after the value of the same land was assessed twice, Tk 285.56 crore spent following changes to the design of Bhanga railway station, and Tk 110.39 crore spent on purchasing vehicles without approval from the Ministry of Finance.
The audit also raised objections over payments of Tk 25.71 crore despite providing ballast at a lower thickness, Tk 3.74 crore spent on installing land boundary pillars without open tendering, Tk 2.57 crore spent on procuring document-management software outside the contract, and Tk 11.05 crore allegedly shown as payments made in the name of individuals for government-owned land.
In addition, the report cited Tk 417.50 crore allegedly given to Dhaka South City Corporation and kept in fixed deposits, Tk 7.32 crore allegedly paid for excess earth filling at Bhanga Junction, and several other irregularities in different components of the project.
More Allegations Against the DG
Apart from the audit objections concerning the Padma Rail project, allegations of Tk 658 crore in irregularities have also been raised against Railway DG Mohammad Afzal Hossain in the purchase of new locomotives and coaches. The Railway Ministry formed a committee to investigate the allegations. However, although the investigation has reportedly been completed, its findings have not yet been made public.
Meanwhile, the Anti-Corruption Commission (ACC) is also investigating allegations against Afzal Hossain involving the embezzlement and overseas transfer of money in the name of supplying stone and repairing motors. The ACC has sought assistance from the Bangladesh Financial Intelligence Unit (BFIU) to verify the relevant financial transactions. However, no wrongdoing has been conclusively established against him in these allegations.
Responses and Assurance of Action
Responding to the allegations, Railway DG Mohammad Afzal Hossain said most of the audit objections had already been resolved and many had been withdrawn. He advised contacting the project director’s office for the latest information.
Current Project Director Naznin Ara Keya said the project authorities were responding to the Tk 13,000-crore audit objections one by one. She said that merely raising an audit objection does not establish an irregularity and that the process of resolving the objections was ongoing.
Dr Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), said the allegations concerning such a major project should be independently and impartially investigated. If the allegations are found to be true, legal action should be taken against the officials, project authorities and contractors concerned.
Railways State Minister Habib ur Rashid said the government was closely monitoring the allegations against the railway DG and other officials. “If evidence is found, necessary action will certainly be taken,” he said, adding that no one is above the law.