One rate to rein in procurement graft
Huge and unexplained price differences in government procurement have raised serious concerns over inflated costs, manipulation and possible corruption in public projects, prompting the government to move towards a unified rate schedule for engineering agencies.
The proposed system is intended to close loopholes that allow different departments to fix vastly different prices for the same or similar goods and materials.
The move follows repeated examples of unusually high procurement prices, including pillows bought for the Rooppur Nuclear Power Plant at prices ranging from Tk6,957 to Tk89,900 and a single pillow proposed for Chittagong Medical University at Tk27,720. In several government hospitals, a pair of goggles was priced at Tk5,000, a pair of hand gloves at Tk35,000 and a small blood-testing tube at as much as Tk134,000. Legal proceedings are under way against individuals accused in some of these cases.
Against this backdrop, a government committee reviewing construction rates has recommended a single basic schedule for goods and materials commonly procured by engineering agencies.
Departments without their own rate schedules would also be required to use the new list.
The committee believes a unified system would reduce the scope for arbitrary pricing and make it harder to manipulate project estimates by using different rates for identical or similar items.
At present, the Public Works Department, Roads and Highways Department, Local Government Engineering Department and Bangladesh Water Development Board have their own schedules of rates.
The Department of Public Health Engineering, Health Engineering Department, Education Engineering Department, Civil Aviation Authority and Bridges Division do not maintain separate schedules.
The proposed system would establish a common basic rate structure while allowing zonal adjustments for remote, hilly, coastal and island areas, as well as differences in distance and transportation costs. Agencies with specialised requirements would have separate schedules.
Rates to be linked to market prices
A special committee was formed on 13 May, convened by Finance and Planning Adviser Rashed Al Mahmud Titumir, to revise the schedule of rates for government construction works.
The decision was taken at an Executive Committee of the National Economic Council (ECNEC) meeting chaired by Prime Minister Tarique Rahman.
The committee includes secretaries from relevant ministries, chief engineers of government agencies and representatives from the Bangladesh University of Engineering and Technology (BUET). It has held several meetings and finalised a comprehensive report.
The proposed schedule would be updated regularly to reflect changes in market prices, foreign exchange rates, VAT and tax rates.
The Bangladesh Bureau of Statistics (BBS) would collect market prices for construction materials and publish the data on its website.
Government agencies would be required to use these unit rates when preparing project estimates.
Kabir Ahamad, Additional Secretary of the Planning Commission and Member-Secretary of the committee, said the consolidated list would cover commonly used materials such as bricks, rods, cement and sand.
He said work on the unified rate schedule was nearing completion and the report would soon be presented at an ECNEC meeting. Organisations with specialised requirements would receive separate schedules.
The committee has also proposed an online portal to update prices according to changes in foreign exchange rates, inflation, transportation costs and tax structures.
The report notes that the average exchange rate rose from Tk84 per US dollar in 2020 to Tk122 in 2026.
The BBS would also collect and publish international prices of materials such as bitumen, stone and sand for use in project estimates.
Unified rates alone cannot stop corruption
Zahid Hussain, former Lead Economist at the World Bank’s Dhaka office, cautioned that a common price list alone would not eliminate corruption and irregularities in public procurement.
He said the government must address the underlying weaknesses in the procurement process through strict enforcement of the Public Procurement Act (PPA) and Public Procurement Rules (PPR).
The entire procurement process should also be conducted through the Bangladesh Public Procurement Authority (BPPA), he said.
“Reforms are primarily needed in this area,” he said, arguing that stronger compliance with procurement rules would help reduce procurement irregularities.
Officials said some agencies currently set prices through their own committees after assessing market rates, while others use previous-year prices adjusted for inflation.
This has resulted in significant variations in the prices of similar products.
There is, for instance, no standardised price list for machinery and equipment procured by the Ministry of Health and the ICT Division.
The proposed unified schedule is therefore aimed not merely at standardising prices but at strengthening accountability, making project estimates more transparent and narrowing opportunities to inflate procurement costs.
