Uncertainty to start counting concessional period of Dhaka Elevated Expressway (DEE) project is yet to over, as its contractor once again missed the deadline for submission of financial report as per the contract.
Italian-Thai Development PLC, contractor of the public-private partnership (PPP) project, will have to submit the financial report, known as financial closure, to start the project and enjoy 25 years payback period. After the concessional period, the government will take over the expressway's ownership.
Sources said the PPP contractor or concessionaire has sought nine months more time for submitting its financial closure, as there is a provision in the PPP agreement.
The financial closure is required to commence the full-fledged construction of the expressway by informing the government about the source of financing.
Earlier, Bangladesh Bridge Authority (BBA) announced the beginning of the 26-km expressway construction in August. It, however, has given the concessionaire a new deadline until October for submission of financial closure to start counting 25-year concessional period.
Official sources claim that Ital-Thai has been continuing their piling work since official inauguration of the construction work. But it sought the time again for submission of financial closure due to technical reasons.
They said upon receiving an application in this regard from the company recently, BBA has sought comments from the project advisors, including PPP Authority, regarding waiver. BBA has already got green signal from some of them.
"This project has gone through different challenges since signing of the concessional agreement because of factors related with the government side as well as the private partner side. So waiver can be given to continue the partnership," said an official.
He said BBA has already taken advice from all concerned, including PPP Authority as well as legal and commercial advisors, to give the company the desired extension.
BBA and Ital-Thai signed the first agreement in January 2011 and the second one in December 2013 as the expressway's design was changed significantly.
Many of the project's challenges, including completion of land acquisition procedure, have already been overcome by both the government and the company. But, counting of concessional period could not be started.
Sources said BBA is considering granting the nine-month waiver to Ital-Thai. It will ask the company to submit a work-plan, showing source of fund, for continuing the construction work during the waiver period.
It is learnt that the concessionaire wants to carry out the construction work in full swing during the waiver period, and it is also ready to start counting concessional period.
According to the agreement, 21 per cent of the US$ 1.2 billion-cost project will come from equity, 27 per cent from vulnerable group feeding (VGF), and the rest from other sources.
VGF fund will be provided by the government on completion of the first-phase work from Hazrat Shahjalal International Airport to Mohakhali.
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