Dhaka MRT cost hike mirrors global post-pandemic trend

The rise in the cost of the Dhaka Mass Rapid Transit (MRT) Line-1 project-from USD 6.4 billion in 2019 to nearly USD 8 billion in 2025-reflects global economic turbulence rather than local inefficiency, according to experts and international financial data.

They say the escalation is consistent with worldwide trends in infrastructure spending since the COVID-19 pandemic, compounded by currency depreciation, energy price shocks, and higher costs of construction materials.

The World Bank (2023) and IMF Global Economic Outlook (2024) report that prices of essential construction materials rose globally by 30 to 60 per cent between 2020 and 2023. Pandemic-era disruptions to supply chains caused shortages of steel, copper, and cement-inputs critical to large-scale transport infrastructure-while the UN Conference on Trade and Development (UNCTAD, 2022) noted a 300 per cent surge in international freight costs.

The Bloomberg Commodity Index (2023) similarly tracked record-high input prices across Asia, the US, and Europe. This global shock directly affected Dhaka's MRT Line-1, which relies on imported machinery, tunnelling systems, and rolling stock financed under Japanese assistance.

"The price escalation is consistent with global infrastructure trends since the pandemic. Bangladesh is not an outlier," said a senior transport economist familiar with JICA-supported projects.

Currency depreciation has deepened the financial strain. The Bangladeshi Taka lost about 28 per cent of its value against the US Dollar between 2019 and 2024, raising local costs for foreign contracts, according to the Bangladesh Bank's 2024 Annual Report. Volatility in the Japanese Yen-the main procurement currency for the project-along with Euro fluctuations further complicated budgeting and payment schedules.