Project gets costlier for contractor's plea

Project gets costlier for contractor's plea

Chinese firm agreed to do the job at $280m, now demands $341m

A Chinese firm that backtracked from unsolicited negotiations for a job to upgrade the Cox's Bazar Airport last year returned to the table last week but it is demanding 15 percent more than what it had asked for previously.
The Civil Aviation Authority of Bangladesh (Caab) floated a tender in 2011 to upgrade the airport's runway for $57 million but it made almost no headway. Last year, Caab came up with a plan to upgrade the airport to international standards.
The idea was to enable large planes from Europe, America and Eastern Asia to land straight at Cox's Bazar with tourist wishing to see the longest sea beach in the world.
Chinese Avic International Engineering Company wanted $297 million for the job, sources said.
A Caab official said, “Although the company had verbally agreed at $280 million in August last year after eight months of negotiations, it continued to haggle saying such a budget would lead to compromise of standards.”
“In the last week of November when the negotiations were still on, the company stopped communicating without any explanation,” the official said wishing anonymity.
The political arena was volatile during that time.
The company returned to the table after the new government was formed on January 12 and demanded $341.55 million for the job.
A Chinese delegation led by Chinese Ambassador Li Jun in Dhaka held a meeting with the secretaries to the foreign and civil aviation ministries and the Caab chairman on January 29 at the foreign ministry.
The meeting discussed the job, its specifications and cost. The work would be done on government-to-government basis under a Chinese soft loan, meeting sources said, adding that another meeting was scheduled for February 14.
Former civil aviation minister Faruk Khan said China had agreed to finance the project with less than 2 percent interest. There would be no payment in the first seven years, while the loan would have to be repaid in 20 years, he said.
He said the Chinese company was demanding something around $300 million but he had asked the Caab chairman to stay between $260 million and $270 million.
In 2009, Caab wanted to expand the runway to 9,000 feet from 6,775 feet, strengthen load sustaining capacity of the runway, taxiways and the apron, build a fire station, a terminal building, a cargo village and embankments and enclosure walls. It also wanted installation of equipment for VHF omnidirectional range, distance measurements, instrument landing system and automatic meteorological observation system.
Caab floated the tender for the work in 2011 and two Malaysian, one Turkish, one Chinese firm and an Ital-Thai joint venture submitted bids for the job.
Turkish firm Kuanta Construction was the lowest bidder but Faruk Khan told The Daily Star that the firm was not awarded the work since it had no experience in constructing runways.


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