Submerged in losses, Karnaphuli Tunnel going under as costs outweigh earnings

The revenue from tolls fails to cover even one-third of maintenance costs in the year following its inauguration

The Karnaphuli Tunnel, Bangladesh’s first road tunnel built beneath the river, was touted as a game-changer. Built to accommodate a high volume of traffic, it was envisioned as a revenue-generating marvel, one that would not only cover its construction costs but also repay hefty loans, as promised by the Awami League government.

Yet, reality has carved out a different story.

In the year since its grand opening, toll revenues have barely managed to scrape together a third of the maintenance costs, casting a shadow over the tunnel’s viability.

As a result, the ambitious venture has turned into a ‘loss-making’ project.

Experts contend that the project’s financial footing was shaky from the start, inevitably leading to its current predicament.

They urge the government to reconsider its approach, suggesting a strategic pivot for more effective implementation and a path toward sustainability.

The previous government hoped that the tunnel’s opening would lead to positive changes on both sides of the river, sparking economic growth, and improving communication on a global scale.

However, the lack of significant industrial development at both ends of the tunnel and the consequences of "unplanned thinking" have contributed to the project’s challenges.

Road Transport and Bridges Advisor Muhammad Fouzul Kabir Khan said the Karnaphuli Tunnel was more of a “showpiece project” under the previous government rather than one focused on operational efficiency.

The tunnel was inaugurated by then-prime minister Sheikh Hasina on Oct 28, 2023, and opened for vehicle traffic the following day.

The authorities had initially projected that around 18,485 vehicles would use the tunnel daily in the first year.

However, current figures show an average of just 3,910 vehicles per day.

The toll collection averages Tk 10.37 million daily, but maintenance costs reach nearly Tk 3.75 million, meaning that the daily earnings cover less than one-third of the expenses.

On Sunday, Oct 20, 2024, only 3,361 vehicles used the tunnel, generating around Tk 1.023 million in tolls, while on Oct 16, a total of 3,473 vehicles contributed Tk 995,200. On Oct 11, 6,208 vehicles passed through, yielding nearly Tk 1.73 million in tolls.

According to the Karnaphuli Tunnel authorities, a total of 1,411,412 vehicles have used the tunnel from Oct 29, 2023, to Oct 22, 2024, resulting in Tk 3.744 billion in toll revenue.

The highest traffic in a single day was recorded on Nov 3 of last year, when 14,795 vehicles passed through, generating over Tk 3.354 million in tolls. Even on that day, the tolls did not cover the entire operational cost.

A toll-related official from the Karnaphuli Tunnel authority told bdnews24.com: "Despite a decrease in traffic due to the overall situation in the country over the past few months, the number of vehicles using the tunnel has been increasing this month. We are collecting an average of around Tk 1 million in tolls daily."

A memorandum of understanding for the construction of the Karnaphuli Tunnel was signed in Beijing on Jun 10, 2014, in then-premier Hasina’s presence.

After receiving approval from the Executive Committee of the National Economic Council, or ECNEC, in November 2015, construction began in December 2016.

Initially set to be completed by June 2020, the deadline was extended to 2022, and the project cost ballooned to Tk 106.9 billion.

This 3.32-kilometre tunnel features two 2.45-kilometre-long tubes, with a total of 5.35 kilometres of connecting roads at both ends, as well as a 727-metre-long overbridge at the Anwara end.

The China Communications Construction Company, or CCCC, is responsible for both the construction and the toll collection and maintenance of the tunnel, which entails a payment of Tk 9.84 billion.

This includes Tk 3 billion for the purchase of scanners, making the actual maintenance cost Tk 6.84 billion, amounting to a daily maintenance expenditure of Tk 3.746 million.

The total construction cost of the tunnel has reached Tk 102.55 billion, with Tk 60.7758 billion owed to China as part of the loan repayment.

‘PURPOSE WAS CORRUPTION AND SHOWPIECE’

Advisor Fouzul described the Karnaphuli Tunnel as a loss-making project.

He told bdnews24.com: "The tunnel has been built. Everyone knows the traffic is low, and the maintenance costs are high. There is no way to recover these expenses or 'redo' them. This is true not only for the tunnel but also for the railway connection of the Padma Bridge."

Fouzul said such projects were not intended for public benefit but rather to dazzle the public. "These have been executed with specific agendas — corruption and showpieces... We have built the tunnel. We will see these things. It is not possible to address everything simultaneously. We are trying to correct our mistakes one at a time."

Regarding increasing traffic in the tunnel, the advisor said they are considering whether the tunnel could enhance connectivity with Cox’s Bazar, particularly in relation to bypassing Chattogram city for better links to Dhaka.

This could potentially increase traffic in the tunnel, he said.

A 'SILENT THREAT' TO THE ECONOMY

City planning expert Engineer Delwar Hossain Majumdar has described the Karnaphuli Tunnel as an “ambitious” project, pointing out that its current revenue does not even cover one-third of its maintenance and operational costs.

He warned Bangladesh will need to repay China’s loan with interest, without any contribution to the gross domestic product, or GDP.

“In simple terms, this project has failed,” he said.

Delwar told bdnews24.com: “After the tunnel’s inauguration, some people visited out of curiosity, which may have temporarily boosted traffic. However, from a commercial perspective, this project was never sustainable, as we’re now realising.

“Engineers in Chattogram had foreseen this, but our suggestions were not considered at the time,” he said.

He also cautioned that the tunnel could become a ‘silent threat’ to the country’s economy.

He added, “The government must consider how to make this tunnel more effective, particularly by widening roads and fostering industrial growth at both ends of the tunnel.”

Transport expert Prof Md Hadiuzzaman from the civil engineering department of Bangladesh University of Engineering and Technology, or BUET, said: “The Karnaphuli Tunnel is a mega project. Such projects require heavy investments in surrounding areas, meaning the planning needs to be integrated on a mega scale. Unfortunately, this hasn’t happened here.”

“At one point, we were proud of having the country’s first road tunnel. However, the economic corridor or potential mentioned hasn’t been realised. In Asia, or in our neighbouring countries, road tunnels aren’t common due to their high construction and maintenance costs,” he explained.

Prof Hadiuzzaman recommended that, since the tunnel has been constructed, making it functional should be the next step.

He suggested establishing heavy industries at both ends of the tunnel, and ensuring roads are designed to accommodate heavy vehicles.

“If a few more heavy vehicles are using the road, it doesn’t necessarily mean economic activity has increased. To achieve a proper return, the tunnel must be transformed into an economic corridor. This involves widening roads from Mirsharai Industrial Zone to Anwara and Cox’s Bazar, and establishing heavy industries along with proper land management,” he said.

He also pointed out that although these plans may exist on paper, they have yet to be effectively implemented.

[Writing in English by Arshi Fatiha Quazi]