Meghna Innova Rubber Company Ltd, a subsidiary of the Meghna Group, has commenced manufacturing tyres for buses and trucks with a Tk1,300 crore investment. This latest expansion positions Meghna, the country's largest bicycle exporter, to reduce reliance on imported bus and truck tyres, thereby saving valuable foreign currency.
"Since last month (October), we have started producing 15-inch to 20-inch bias tyres for trucks and buses. Our goal is to meet most of the demand for these tyres in Bangladesh within the next six months," Lutful Bari, chief operating officer of the Meghna Group, told TBS.
He added that 80% of the Tk1,300 crore investment has gone into machinery, creating employment for 300 people. By next year, total investment in bias tyres will rise to Tk2,100 crore, adding another 100 jobs.
The company's manufacturing facility spans approximately 65 bighas in Tangail's Mirzapur, with an additional 5 bighas allocated for expanding production of tyres for large vehicles.
Plans are underway to set up a new factory for radial tyres, scheduled for completion by 2026.
"In 2026, we will invest another Tk1,000 crore in the production of radial tyres for trucks and buses," Bari said, noting the focus on adopting British standards and modern technology to ensure quality.
The locally produced tyres are expected to be more affordable than imported alternatives.
Meghna Innova Rubber Co Ltd has already established itself as a producer of tyres for bicycles, motorcycles, three-wheelers and rickshaws under the MTF brand. However, almost all bus and truck tyres in the market are currently imported, according to Lutful Bari.
Other notable players in this sector include Pran-RFL Group, Apex Husain Group, Rupsha Tyres and Chemicals Ltd and Alam Tyre.
Gazi Group, a former competitor in the production of bus and truck tyres, halted operations after a series of arson attacks on its factory in August and September.
Industry insiders estimate that Bangladesh's automotive tyre market is currently valued at around Tk5,000 crore, driven by the growing sales of commercial and passenger vehicles.
Challenges in agricultural tyre manufacturing
In addition to bias tyres, Meghna Group has ventured into agricultural tyre production, producing 28-inch tyres for tractors.
However, marketing these products has been hindered by value-added tax (VAT) policies that favour imports over domestically produced tyres.
"There is no VAT on tyres used in agricultural machinery imported into Bangladesh. However, we have to pay VAT on our finished product," Bari explained.
"We demand from the government that VAT be imposed on imported tyres or, alternatively, that VAT be exempted on locally produced agricultural tyres."
Agriculture tyres, essential for tractors, currently receive VAT refunds when imported under specific HS codes.
To protect domestic industries, the Meghna Group has proposed imposing a 15% import duty and a 5% regulatory duty on imported tyres and tubes, along with an additional tax.
As the Meghna Group continues its expansion in tyre manufacturing, the company is pushing for policy reforms to ensure a level playing field for local producers.
With planned investments in radial tyre production and calls for government intervention to support domestic industries, the group aims to strengthen its position in Bangladesh's tyre market.
The company’s manufacturing facility spans approximately 65 bighas in Tangail’s Mirzapur, with an additional 5 bighas allocated for expanding production of tyres for large vehicles
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The cost of the 17.20 km metro rail MRT-5 (Gabtoli-Dasherkandi) Southern Route project saw a sharp 15% reduction in cost following a recent review, indicating the potential of savings that can be achieved through reassessments of mega projects, initiated by the previous government.
The cost cut, equivalent to Tk6,898 crore, came after Dhaka Mass Transit Company Limited (DMTCL) re-evaluated the project on instructions from the Planning Commission, now led by interim government's Adviser Prof Wahiduddin Mahmud.
Mohammad Abdur Rouf, managing director of DMTCL, told TBS that the costs of various project components were reduced through detailed design adjustments.
The revised project proposal has been submitted to the Road Transport and Highways Division for further review which could result in additional cost cuts, he said.
Project Director Md Abdul Wohab said that the cost was cut by shortening the loan interest repayment period, cutting capital expenditures, and reducing inflated contingency estimates.
According to DMTCL officials, costs may be cut further following scrutiny by the Road Transport Division and finally by the Physical Infrastructure Division of the Planning Commission.
Initially, during the Awami League era, DMTCL had proposed a budget of Tk54,619 crore for the project. An evaluation committee at the Planning Commission reviewed the proposal in April this year but no cost adjustments were made at that time.
After the AL government was toppled, the interim government, led by Dr Yunus, decided to reassess spending on major infrastructure projects. This project was sent back to DMTCL for review leading to a revised projected cost of Tk47,721 crore.
After the initial review, DMTCL submitted the revised Development Project Proposal (DPP) to the Road Transport and Highways Division.
In a letter to Road Transport, DMTCL said the estimated cost was cut based on an analysis of costs, unit rates, foreign loan interest, and feasibility reports, along with a re-examination of the project's context and priorities.
The DPP outlines that of the total cost, Tk39,138 crore will be covered by foreign loans. The Asian Development Bank (ADB) and South Korea have initially agreed to provide the amount.
The MRT-5 southern route will connect the following areas: Gabotli, Technical, Kalyanpur, Shyamoli, College Gate, Asad Gate, Russell Square, Karwan Bazar, Hatirjheel, Tejgaon, Aftabnagar, Nasirabad, and Dasherkandi.
The metro line will run 13.10 km underground from Gabtoli to Aftabnagar and 4.10 km elevated from Aftabnagar to Dasherkandi.
How the cost was reduced
Md Abdul Wohab, project director of MRT-5, told TBS that the revised cost estimation has yet to be finalised, as it still needs approval from the Planning Division.
He said that readjusting the loan interest repayment period resulted in a significant reduction in the overall estimated cost.
"Initially, we estimated loan interest costs over a longer period, but we have now aligned the interest period with the project's duration. This adjustment saved Tk4,700 crore, reducing the total interest from Tk6,500 crore to Tk1,800 crore," he said.
"Additionally, inflated estimates were identified in contingency, which also decreased a little. Furthermore, the cost has been cut down after refining the estimated capital expenditures (Capex), based on detailed design specifics and actual market prices, leading to savings of about Tk1,500-2,000 crore," said the project director.
Abdul Wohab further said, "Typically, initial estimates include extra materials to cover any adjustments later. However, with detailed designs in hand, we now have precise requirements, allowing us to avoid overestimations."
"The cost may decrease further if the dollar rate remains stable. However, fluctuations in the dollar price could increase costs by around Tk800-1,000 crore," he added.
'Proper scrutiny needed for project approval'
Transport expert Professor Shamsul Hoque told TBS that there was a lack of proper scrutiny in approving projects by the previous government, indicating that estimations often went unquestioned.
"No one asked why certain high costs were included. This lack of questioning was partly because those approving the projects also benefited, leading to inflated project estimates," he said.
He continued, "In cases where the project authority self-initiated cost reductions, it became clear that inflated expenses still existed in various segments, especially in large-scale projects."
Urging the current interim government to thoroughly review all ongoing and upcoming projects, Shamsul said, "Over the past 15 years, a culture of inflating costs has developed, leading to our per kilometre construction costs being higher than even in Europe. This was due to a lack of accountability."
He said that to break this pattern, this government must investigate why costs are estimated so high and hold those responsible accountable.
Govt mulls alternatives to MRT-5 with focus on Old Dhaka
An official from the Planning Commission said further reviews will be conducted to assess whether the project is feasible given the current circumstances.
Although the cost of MRT-5 has been reduced, the government is reportedly considering alternatives to this project. The government wants to bring densely populated Old Dhaka under the metro network but the MRT-5 southern route excludes the area.
However, the MRT Line-2 (Gabtoli-Sadarghat-Narayanganj) includes Old Dhaka on its route and is being considered as an alternative to the MRT-5 (Southern Route).
Planning Commission officials said the MRT Line-2, if implemented, will link Gabtoli to Narayanganj via Old Dhaka.
In contrast, commercial development has been limited up to Dasherkandi, the endpoint of MRT-5. Given the economic significance, the Commission is prioritising MRT-2 as the preferred option over MRT-5.
The main route of MRT Line-2 will run from Gabtoli through Dhaka Udyan, Mohammadpur Bus Stand, Zigatla, Science Laboratory, New Market, Azimpur, Palashi, Dhaka Medical College, Gulistan, Motijheel, Kamalapur, Manda, Daksingaon, Damdipara, Signboard, Bhuighar, Jalkuri, and end at Narayanganj Zilla Sadar.
Additionally, its branch line will connect Naya Bazar to Sadarghat via Gulistan, although the feasibility study for this route is still pending.
According to DMTCL, the implementing agency, the construction of the 35 km-long MRT-2 line may cost Tk60,837 crore. However, the final cost will be estimated after the feasibility study.
In addition to the MRT-2, the Commission is considering several alternative options. For instance, the Commission is mulling to exclude the Karwan Bazar section from the MRT-5 (Southern Route). Another consideration is adding a branch line of MRT-2 to Bijay Sharani. Both projects begin from Gabtoli.
In another alternative, the Commission is thinking of constructing MRT-5 (Southern Route) only from Karwan Bazar to Dasherkandi.
A further alternative suggests scrapping the entire MRT-5 (Southern Route) project, with plans to reconsider it if the economic situation improves in the future.
During the Awami League era, DMTCL had proposed a budget of Tk54,619 crore for the project
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