Railway incurs loss over Tk1,500 cr because of syndicates, corruption, mismanagement

Over the past 15 years, Bangladesh Railways has incurred an average annual loss of Tk 1,500 crore, amounting to a staggering Tk 21,000 crore in total losses during this period. Once a profitable sector, the railway system now struggles under the weight of corruption, syndicates, and mismanagement.

The outgoing Awami League government invested Tk 88,000 crore in the railway sector over its tenure. Allegations suggest that a significant portion of this investment was misappropriated, contributing to the losses. Despite other state transport sectors turning profitable, syndicate-controlled operations and unplanned expenditures have kept the railways in deficit.

The Ministry of Railways operates through 13 divisions, including Engineering, Commercial, Stores, and Mechanical, which receive the lion’s share of the budget. Investigations reveal that these divisions have been dominated for decades by a dozen contractors who manipulate government policies and funnel billions of taka through corrupt practices.

Accusations include money laundering by politically connected individuals during successive governments. Between 1991–96 and 2001–06, under BNP rule, Mirza Abbas’s brother Mirza Khokon allegedly controlled the railway’s financial dealings. However, after power shifted to the Awami League, Chattogram-based expelled Jubo League leader Helal Akbar Chowdhury Babar and others took over, maintaining a tight grip on the railway sector for 15 years.

Over 100 tenders have been floated, and five of the 24 previously canceled train leases have been issued in recent months. Allegations point to manipulation by syndicates controlling the tender process. For example, in Chattogram’s eastern division, Helal Akbar Chowdhury reportedly monopolized tenders worth Tk 1,000 crore annually.

Online systems introduced to ensure transparency have not curbed corruption, as multiple tenders are often submitted under different company names but managed by the same syndicates. Prominent contractors like Toma Construction, Max Infrastructure, and SA Corporation dominate mega projects in collaboration with foreign companies.

Key railway projects, including the Dohazari-Cox’s Bazar, Khulna-Mongla, and Akhaura-Laksam routes, have seen dramatic cost escalations. The initial budget for the Dohazari-Cox’s Bazar railway, set at Tk 1,800 crore, has ballooned to Tk 18,000 crore, yet the project remains incomplete. Per-kilometer costs have reached Tk 153.49 crore—significantly higher than the Tk 50-80 crore seen in developed countries for similar projects.

Corruption includes using substandard materials, manipulating contracts, and siphoning funds abroad under the guise of importing machinery. Notably, the Tungipara-Gopalganj rail line, initially budgeted at Tk 1,101 crore in 2010, was completed five years late in 2018 with a final cost of Tk 2,035 crore.

Syndicates led by companies such as Toma Construction and Max Infrastructure have allegedly looted over Tk 30,000 crore during the Awami League regime. These groups exploit political influence to secure projects, extend deadlines, and inflate costs. Additionally, fake Letters of Credit (LCs) have been used to launder money overseas.

Investigations by the Anti-Corruption Commission (ACC) have so far failed to yield actionable results, with inquiries often limited to correspondence without significant follow-up. Whistleblowers within the railways face punitive transfers or demotions for speaking out against these irregularities.

Bangladesh University of Engineering and Technology (BUET) Professor Dr. M. Shamsul Hoque said rampant corruption in the Akhaura-Laksam project, including dubious landfilling practices. He emphasized that high-ranking officials, ministers, and secretaries implicated in corruption must face accountability to restore the railway’s integrity.

The railway remains plagued by inefficiencies, with political favoritism allowing syndicates to retain their grip on tenders and contracts. Even with recent changes in government, the same influential contractors continue to dominate, leaving many projects stalled or incomplete.

Contractors like Toma and Max claim to operate ethically, but evidence of systemic corruption, inflated budgets, and foreign collaborations raises questions about their transparency. Professor Shamsul Hoque warned that unless immediate action is taken against these syndicates, the sector's recovery remains unlikely.

Bangladesh Railways is at a critical juncture, requiring comprehensive reforms to address its deep-rooted issues. Investigations into corruption, stringent enforcement of anti-corruption laws, and increased accountability of officials are imperative to restoring this vital transport sector.