Even a feasibility study of the proposed underground has not been conducted yet. The communications ministry did submit a proposal to the Planning Commission last year seeking Tk 7 crore for the study, but the commission did not approve it.

Sources said a state minister has been tasked with organising the ceremony, where the prime minister would lay the foundation stone of the underground, a move some quarters view as aimed at boosting the ruling party's popularity with the upcoming general election in view.

In the last few months, the Prime Minister's Office (PMO) and the communications ministry have exchanged a number of letters on the subject, without arriving at any specific decision, the sources said.

They said the communications ministry in a letter to the PMO on April 13 recommended formation of an independent authority to supervise and monitor the construction of the underground in Dhaka City. In response, the PMO last week asked the ministry to come up with more specific suggestions about forming the authority.

"Setting up an underground railway in the capital would be a very complicated and expensive project and such an authority would be required for finalisation, coordination and implementation of it," the ministry observed in the letter.

The authority can be formed under the communications ministry, the PMO or any other ministry, the letter said, adding, if necessary, the authority can also operate the underground.

The ministry sent another letter to Contech Limited, a local firm which had participated in the pre-qualification bid called by Bangladesh Railway in November 2002 for constructing the underground on a 'build, operate and transfer' (BOT) basis.

In the letter, the ministry regretted not issuing a letter of intent in favour of the firm at this stage, as it had not provided adequate information about the financier and partners in the mammoth project.

The ministry asked Contech to submit details of its legal status, technical, management and financial capability, project implementation experience, and status of investment ownership in the proposed project.

In the pre-qualification bid, Contech submitted a proposal for establishing a 52km underground at a cost of Tk 52,000 crore under a joint venture of a number of foreign and local organisations.

According to Contech proposal, MTRC of Hong Kong will work as the constructor, Sena Kallyan Sangstha, Bangladesh as financier and project manager, the Bangladesh University of Engineering and Technology as the lead consultant, Hitachi of Japan as equipment supplier, and JBIC as provider of supplier's credit and syndicated bank loan.

But, the firm did not provide authorisation letters of the companies it named as partners and financier in the project, the ministry pointed out in the letter.