Uniform rates, digital system proposed for govt construction costs

A government committee has recommended introducing uniform base rates for construction materials, equipment and labour across public engineering agencies to reduce inconsistencies in estimating construction and maintenance costs of development projects.

The recommendations were made in the “Schedule of Rates Update and Reform Report 2026”, prepared by a committee formed following instructions from the Executive Committee of the National Economic Council (Ecnec). The report was presented at an Ecnec meeting chaired by Prime Minister Tarique Rahman at the Secretariat today (4 November).

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.

Speaking at a press briefing after the meeting, State Minister for Planning Md Zonayed Abdur Rahim Saki said the government was preparing a rate schedule to determine project costs.

“Software and artificial intelligence (AI) would be used to monitor whether project costs followed the prescribed rates,” he said. 

The government has also directed that relevant experts be included in project evaluation committees to assess the justification and actual prices of items or work not covered by the rate schedule.

Saki said the government was working to ensure that public procurement prices reflected market rates while strengthening accountability in public spending.

According to the report, government engineering agencies currently follow separate rate schedules, resulting in different cost estimates for similar materials and construction work. Delays in updating these schedules also create discrepancies between official estimates and market prices.

To address this, the committee recommended common base rates and a standard cost analysis method, with unique codes for construction materials and work items.

It also proposed updating rate schedules every three years based on market conditions, with earlier adjustments allowed if fuel, electricity or key construction material prices rise sharply.

A software-based web portal has been recommended to allow engineering agencies to prepare, review and update rate schedules through a common platform.

Regional cost adjustments

The committee proposed regional rate adjustments alongside uniform base rates, as transporting and supplying construction materials costs more in hilly, coastal, island and remote areas. A uniform rate structure may not adequately reflect these differences, the report said.

It also recommended including modern construction methods, prefabricated materials and environmentally friendly and recycled products in the rate schedules.

The report identified duties and taxes, transport costs, alleged extortion by transport operators, manipulation by intermediary importers and market dominance by some traders as factors that could drive up construction material prices.

It recommended reviewing taxes and duties on rods, stone and bitumen, alongside the VAT and tax structure for contracting work.

Greater use of railways and waterways for transporting heavy construction materials was also proposed to reduce costs, along with stronger monitoring to prevent extortion and irregularities.

The committee further recommended clearer responsibilities for engineering agencies in preparing sector-specific rate schedules.

Six-month implementation plan

The report proposed implementing the reforms within six months.

Under the plan, uniform base rates and cost analysis methods would be approved within the first three months, while engineering agencies would update their respective rate schedules over the following three months.

The committee expects the reforms to reduce discrepancies in project cost estimates and bring government construction rates closer to market prices.