Ruposhi Bangla renovations fail to start on time

The much-awaited renovation work at Ruposhi Bangla has been delayed due to the failure to award contracts for the massive reconstruction on time.

The renovations, which are part of a 30-year management deal signed in February 2012 between Ruposhi Bangla's owner -- the state-run Bangladesh Services Ltd -- and InterContinental Hotels Group, were scheduled to take off on November 1. The hotel has already been shut down on September 1 in preparation.

But due to a wide gap between the price quoted by the lowest bidder and the estimated costs, the authorities failed to wrap up the tendering process on time.

The difference is around $3 million, and as the issue is not settled yet, the contract cannot be awarded, said an official asking not to be named.

There are differences as well on the timeframe for the first leg of the renovation work, called 'stripping and phasing'.

A total of 182 days have been kept for the first phase of renovation but the bidder is seeking 215 to 220 days, according to the official. But he is hopeful that the issues will be settled soon and the renovations will take off next month.

As per the work schedule, a total of 16 months have been allocated to accomplish the entire renovation work -- the cost for which has been fixed at $43 million -- before starting the new journey under InterContinental from January 2016.

Sahidus Sadiq, marketing and communication manager of Ruposhi Bangla, said work for the second phase, which involves remodelling or refurbishment, will begin soon after the first phase is completed. Similarly, the third phase -- fabrication -- will begin once the second phase is wrapped up.

Asked if the slow work progress will delay the next phases as well as the hotel's reopening, he said: “It might be. But, we have the mechanism to speed up the process.”

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 the 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 parties over the renovation cost and the fate of the employees. Eventually, Bangladesh Services took over the hotel's operations, renaming it to Ruposhi Bangla Hotel.

The hotel's net profits plunged 59 percent year-on-year to Tk 19 crore in 2013 due to political turmoil. The figure was Tk 46.51 crore in 2012 and Tk 40.12 crore in 2011.

Bangladesh Services has been listed since 1984. The government owns 99.68 percent of the stakes in the company, while institutional investors hold 0.04 percent, foreign investors 0.19 percent and general public 0.09 percent.