Bangladesh proposes uniform rates for public construction costs

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Highlights

Bangladesh's reform plan proposes uniform base rates and a standard cost analysis method for public construction, with approval expected within three months.
The report recommends updating rate schedules every three years based on market conditions, with earlier adjustments for sharp increases in fuel, electricity, or material prices.
Proposals include regional rate adjustments, use of digital platforms, reviewing taxes and duties, and wider oversight to align government construction costs with market rates and reduce irregularities.

Reform plan sets common pricing framework

As reported by The Business Standard, a government committee recommends introducing uniform base rates for construction materials, equipment and labour across public engineering agencies. The proposal is set out in the "Schedule of Rates Update and Reform Report 2026", prepared by a committee formed on instructions from the Executive Committee of the National Economic Council, and presented at an Ecnec meeting chaired by Prime Minister Tarique Rahman at the Secretariat on Nov. 4.

The report, signed by Prime Minister's Adviser on Finance and Planning Rashed Al Mahmud Titumir, also proposes standardising cost analysis, introducing regional rate adjustments and establishing a digital system for preparing and approving rate schedules. State Minister for Planning Md Zonayed Abdur Rahim Saki says the government is preparing a rate schedule to determine project costs, and that software and artificial intelligence will be used to monitor whether project costs follow prescribed rates.

The committee says separate rate schedules used by government engineering agencies now produce different cost estimates for similar materials and construction work, while delays in updates widen the gap with market prices. To address this, it recommends common base rates, a standard cost analysis method and unique codes for construction materials and work items.

The plan calls for rate schedules to be updated every three years based on market conditions, with earlier adjustments if fuel, electricity or key construction material prices rise sharply. It also proposes a software-based web portal so agencies can prepare, review and update rate schedules through a shared platform, while relevant experts are included in project evaluation committees for items or work not covered by the schedule.

Regional adjustments and spending oversight

The report says a single national rate structure may not reflect higher transport and supply costs in hilly, coastal, island and remote areas, so it proposes regional adjustments alongside uniform base rates. It also recommends adding modern construction methods, prefabricated materials and environmentally friendly and recycled products to official rate schedules.

The committee identifies duties and taxes, transport costs, alleged extortion by transport operators, manipulation by intermediary importers and market dominance by some traders as factors pushing up construction material prices. It recommends reviewing taxes and duties on rods, stone and bitumen, alongside the VAT and tax structure for contracting work, and proposes greater use of railways and waterways to move heavy materials at lower cost.

The reform package further calls for clearer responsibilities for engineering agencies in preparing sector-specific rate schedules and stronger monitoring to prevent extortion and other irregularities. Under the timeline, uniform base rates and cost analysis methods are to be approved within three months, followed by agency-level updates over the next three months, with the committee expecting the changes to reduce discrepancies in project cost estimates and bring government construction rates closer to market levels.

In our earlier article on Menara Asia’s Menarabena construction platform in Malaysia, we covered how the B2B system links contractors with building material suppliers while centralising certification, technical documentation and compliance information. We also noted the aim of improving supply-chain efficiency and cost management through digital processes, while keeping existing regulatory approvals and product certification requirements in place.

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