Fund crisis of Dhaka Elevated Expressway (DEE), the country's first Public-Private Partnership (PPP) project in road infrastructure sector, is likely to end soon with three local banks and a Chinese bank coming up in assistance, sources said.
The three local banks -- Sonali Bank, BRAC Bank and Modhumati Bank -- have confirmed financing around Tk 10 billion in the DEE project, they said.
Besides, China Development Bank (CDB) has confirmed financing US$ 800 million in the $ 1.25 billion project creating hope of ending the long-standing fund crisis of the project aimed at serving as a remedy to the traffic jam of the city.
Managing Director of Italian-Thai Development PLC, the concessionaire of the project, Montchai Musicabud said they have completed the procedure of getting the loan from the three local banks and the Chinese bank.
"We expect to sign the loan agreement with the local banks within this month (January)," he told the FE over phone adding that the contract with the CDB was completed in August last year.
The BBA (Bangladesh Bridges Authority) and the Italian-Thai Development PLC signed the loan agreement for the second time in December 13, 2013 after the first agreement signed in January 2011 became obsolete due to change of the project's alignment.
The concessionaire was also unable to manage fund for the project due to various reasons.
The government had set targets to start construction of the 26-kilometre expressway since its initiation on various occasions, but it could not do so for reasons like failure to hand over land to the concessionaire.
It also faced different obstacles including lack of necessary studies and detailed design to get confidence of the local and foreign banks and development partners to finance the project.
For that, the concessionaire could not state sources of funding, an important factor in a PPP project, clearly to the implementing authority (BBA).
When asked, Project Director Quazi Ferdous said its work would be visible in next two to three months.
Land for the construction yard has already been handed over to the concessionaire, he said.
Meanwhile, sources said the fund gap to remain after the funding of local banks and the Chinese bank would be covered by the concessionaire and the government.
The government would also bear Tk 32.16 billion as an additional cost for the expressway to acquire land in the city and resettle the affected people at suitable places.
The BBA has completed necessary studies including resettlement plan and environmental impact assessment, the sources said.
However, the land needed to start the first phase work from the Hazrat Shahjalal International Airport to Mohakhakli is yet to be handed over.
Meanwhile, the concessionaire has selected a Chinese company -- China Railway Construction Corporation (CRCCI) -- to work as sub-contractor of the project.
The DEE would be constructed from Hazrat Shahjalal International Airport to Shanir Akhra of the Dhata-Chittagong highway with five connecting points to pick and drop traffic.
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