JS panel suggests penalty for delay in Ruposhi Bangla renovations

The parliamentary standing committee on the civil aviation and tourism ministry yesterday recommended taking punitive measures against the contractors of Ruposhi Bangla, as renovation work of the state-owned hotel was not completed in time.

Ruposhi Bangla was expected to reopen in August this year with a new name -- InterContinental Dhaka. But it may not reopen until the first quarter of 2017 due to the delay in renovations.

“We expressed our dissatisfaction over the renovation work of Ruposhi Bangla as well as Pan Pacific Sonargaon,” said Muhammad Faruque Khan, chairman of the standing committee.

He asked the chairmen of the two state-owned hotels to come up with concrete decisions in the next meeting of the standing committee.

“I have recommended imposing a fine on those who are responsible for the delay.”

About 15 contractors work on renovations from start to finish on the hotel. He said the contractors tried to explain the reasons for the delay, referring to the recent Gulshan café attack and a fire incident at Benapole land port that hampered the arrival of some key personnel and consignments in time.

“Although they gave some valid reasons, it is also a fact that they should have completed the renovation work in time in line with the contract agreement,” said Khan, also a ruling party lawmaker.

Under the original plan, the renovation was supposed to take 16 months and cost $50 million or Tk 400 crore. But the delay may cost an additional $20 million or Tk 160 crore.

The renovation, which is part of a 30-year management deal signed in February 2012 between Ruposhi Bangla's owner, Bangladesh Services Ltd, and InterContinental Hotels Group, was to start on November 1, 2014.

But due to a big difference in the price quoted by the lowest bidder and the estimated cost, the authorities failed to wrap up the bidding in time.

However, the issues were later settled through negotiations.

The hotel was shut on September 1, 2014, for early preparations, such as asset and equipment disposal and rearrangement and transfer of employees. The renovation work finally began in March last year.

InterContinental had earlier run the iconic Dhaka hotel from 1966 to 1983, after which Sheraton took over. Its contract ended in December 2008 but the government requested it to continue operations until April 30, 2011, for the ICC Cricket World Cup.

Starwood, the parent company of Sheraton, gave Bangladesh Services Ltd a conditional extension offer in 2009, but there was a disagreement between the two sides over the renovation cost and the fate of the employees.

Eventually, Bangladesh Services took over the hotel's operations, renaming it Ruposhi Bangla Hotel.