Earlier local company Contech proposed to build up a 52-kilometre underground railway network with six major routes at a cost of Tk 5,200 crore using cut and cover method that the company termed 'cheap and cost effective'.

"We have recognised that an underground railway system is necessary for solving the problem of traffic jam and easing transportation of the city people," said a high official in the Ministry of Communications.

The ministry will recommend forming the independent MRA like Jamuna Multipurpose Authority for building the subway, development of which involves different government agencies, he said, adding that a concrete decision about forming the authority will be taken very shortly.

He said the MRA will examine whether the system would be developed through cut and cover or tunnel boaring method and take the final decision through coordination among the government agencies concerned.

Conducting a feasibility study by the government is necessary before going for such a complex construction, he added.

A few months back, the communications ministry submitted a proposal to the Planning Commission for allocating Tk 7 crore for conducting the study but the ministry is yet to get it, the official said.

The system will be developed with the involvement of foreign company on build operate and transfer (BOT) basis, he said.

He, however, said building a subway in an overcrowded city like Dhaka would not be very easy, as such a construction will require stoppage of traffic for a long time.

The government called a pre-qualification tender in February 2003, seeking application to set up underground railway in Dhaka.

Only two companies responded, of which local firm Contech Limited passed in the pre-qualification bid.

Contech Ltd also committed to keep the fare below that for surface transport.

The tunnel boaring method is very expensive and time consuming, Contech Managing Director engineer Masud Reza said, adding that neighbouring India set up metro rail in Delhi and Kolkata under cut and cover method.

Reza welcomed the government's plan to set up an independent authority for the purpose.

After completion of the subway, MRA will maintain time schedule of the underground rail and monitor the fare and ticketing system, sources said.