Fumbling on financing modes stalls Dhaka-Ctg expressway project

The Dhaka-Chittagong expressway project seems stalled at its procurement stage under public-private partnership (PPP) for growing confusion over the financing mode despite hiring a giant multinational as transaction adviser.

Sources said some recent moves by the government caught the project authorities off guard, at a time when Pricewaterhousecoop-ers, a multinational professional services network based in New York, was about to begin its bid-preparation work.  

Pricewaterhousecoopers was appointed transaction adviser of the project on September 28 to prepare bid documents for works on the 217-kilometre expressway that involves an estimated cost of US$8.0 billion.

The foreign firm will also complete the procurement stage through evaluating bidding documents of the companies to be participating in the expensive project under the same funding arrangement.

But, though the kickoff meeting with the consultant had already begun, the project office still remained caught in quandary about the funding arrangement, the sources said.

Finalising funding mode is vital for preparing bid documents for such an important infrastructure project.

"Since 2012, this has been carried out as a very attractive PPP project. But recent moves indicate the project, at one time, would be implemented on G2G basis while at another time it seems under PPP," said a project-insider. Preferring not to be named, he said it had been difficult for them to guide the consultant in continuing project work as effort for the detailed design and other procurement-stage works would be valueless in the case of G2G (government-to-government) arrangement.

However, Road Transport and Highways Division secretary MAN Siddique said they were still working to implement the project under PPP.

"We are still on the decision to implement the project under PPP. If MoU is signed with any company, it will have to come through PPP," he told the FE.

A competent source, however, said the project office was also under pressure as the company with whom the Roads and Highways Department signed MoU in February wants to get the work based on their own proposal.

The Ministry of Road Transport and Bridges signed a memorandum of understanding with China Harbor Engineering Company Ltd in February after it had submitted the proposal to do the entire work on G2G basis with its own feasibility study and detailed design.

But the ministry has also given the green signal for striking deals with three more Chinese companies to work on the same project from the point that it might not be possible for one company to carry out the entire 217-kilometre construction works.

Sources, however, said the deal with these companies could not be done for binding terms in the first MoU during one year validity. These companies proposed both the modes of funding arrangement. Since the project was launched, the RHD has conducted feasibility study and detailed design work by appointing SMEC International Pvt Ltd with a loan of Tk 750 million provided by the Asian Development Bank. Government contribution in the technical part of the project is Tk 250 million.

The consultant recently recommended a route for the expressway to be crossing along the existing Dhaka-Chittagong four-lane highway through Daudkandi, Comilla and Feni with some elevated structures. The Prime Minister endorsed the route last month.

Construction of an elevated expressway through the corridor would cost US$ 8.4 billion (840 crore dollars)

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