The government in the last seven years has failed to issue the work order for the 47km Dhaka Elevated Expressway (DEE) even though its construction has been inaugurated twice.
The private investor of the DEE, on the other hand, has repeatedly failed to come up with the money for the public-private partnership (PPP) project and has completed seven percent of the work in seven years.
The seven percent progress includes preparation of the construction yard at Kawla on Airport Road, building of some piers and other work.
“We are yet to issue the work order formally,” said DEE Project Director Quazi Muhammad Ferdous, adding, “Whatever progress has so far taken place is on an amicable and mutual understanding between the government and the private concessionaire.”
The work order is important in the grand scheme of things. It marks the beginning of the 25 years' concession period and the three and a half years' time for the construction.
“The expressway construction has not yet commenced formally, as neither of the parties could meet the contractual terms within the stipulated time,” said Ferdous, adding, “The government could not hand over the land in time and the concessionaire faltered on getting the fund time and again.”
The expressway construction was inaugurated twice, first by Prime Minister Sheikh Hasina in April 2011 for completion by mid-2014 and once again by Road Transport and Bridges Minister Obaidul Quader in August 2015.
On the ceremonial “ground breakings”, Ferdous said it was for encouraging the concessionaire to go ahead with the work.
Bangladesh Bridge Authority (BBA), implementing agency of the scheme, signed a deal with Ital-Thai Development Public Company in January 2011 to build the much-hyped expressway, stretching from Shahjalal International Airport to Kutubkhali on Dhaka-Chittagong highway under PPP at a cost of Tk 8,703 crore.
According to the agreement, among other vital preparatory work, the BBA was required to hand over the land for the expressway route for the first segment -- from the airport to Banani -- within six months. Ital-Thai was required to get the fund and submit financial closure for the work order.
Until August 2015, the BBA could hand over only half of the land of the first segment. It was only last year the government was able to hand over the entire land of this segment due to complications in land acquisition, resettlement and relocation of utility network, he said.
“We hope to formally start the construction work by March, as the concessionaire is expected to make a deal with a Chinese financier soon,” he said. Ital-Thai had finished 900 pilings out of the 1,200 needed in the first segment, he added.
The concessionaire also has to start the construction work within three months of the work order issuance.
Ital-Thai Ltd had difficulties getting fund since the very beginning. Initially, it intended to seek loan from International Finance Corporation of the World Bank, which requires Environmental and Social Impact Assessment report for approving loans. Ital-Thai failed to get the assessment done in time.
In 2015, it signed a contract with China Railway Construction Corporation but it amounted to nothing. It signed another deal with Chinese Investment Global Foundation Company in December 2016 and that too did not work.
The contract was revised in December 2013, incorporating alteration to a 4km alignment in the southern end of the project to avoid land acquisition.
Though there was a sovereign guarantee that the concessionaire's revenue generation would not be hindered in anyway, the government unilaterally altered two vital ramps, one on Manik Mia Avenue and the other at Palashi, said a well-placed source.
Similar unilateral changes to ramp layouts took place in Tejgaon and Kakoli. Of the 31 ramps, four have now been altered and shortened.
“About 28 percent revenue return was calculated with the Manik Mia Avenue ramp and its alteration might have dampened the prospective financiers,” said Prof Shamsul Hoque, a member of Dhaka Elevated Expressway's technical expert team.
The layout design has been changed more than 100 times to resolve land availability issues, accommodate reservations raised by various government and private organisations, said Montchai Musicabud, representing Ital-Thai.
Financial closure would be done within March and formal construction start date would be issued by the BBA in the first week of April, marking the start of the concession period, said Montchai.
He said formal construction work was expected to start in April and the first segment completed by mid-2019.
For the first segment, Ital-Thai got some land only in February 2016 and it finished 50 percent of the required ground piling and pile cap, said Montchai, adding that about 56 piers out of 350 have been done.
The physical work started in August 2016.
Ital-Thai is eyeing production of 12 I-girders per day from March and five cross beams were being installed, he said.
The company has so far spent nearly $90 million on mobilising machines and equipment, physical work, design work and management fees, he claimed.
The project cost was revised to Tk 8,940 crore along with the contract agreement.
The government is to spend Tk 4,885 crore on land acquisition, resettlement and relocation of utility service lines. Therefore, the total cost of the project is Tk 13,825 crore.
The government has already spent Tk 2,500 crore on land acquisition, resettlement and utility relocation.
It would also pay 27 percent of the project costs as Viability Gap Fund after completion of the first segment.
The proposed route of the expressway is Hazrat Shahjalal International Airport-Kuril-Banani-Mohakhali-Tejgaon-Moghbazar-Kamlapur-Saidabad-Jatrabari and Dhaka-Chittagong highway in Kutubkhali.
The 47km length includes the length of the mainline (20km) and 27km of the 31 ramps in the original design.
The first segment is nearly 7.5km long, second one 6km and the third segment 6.5km long. The entire scheme requires 220 acres, 71 acres for the first segment.
The government has to acquire 26 acres of private land along the entire route and at least 7 acres for the first segment alone.