Dhaka Elevated Expressway work 'set to resume in August'

The construction of the much-anticipated Dhaka Elevated Expressway project is set to resume in August as the main contractor, Italian-Thai Development Public Company (Italthai), says it has secured the necessary funding to complete the work.

Bhaskon Khannabha, in-charge of Italthai in Bangladesh and the managing director of First Dhaka Elevated Expressway Company Ltd, told The Business Standard on Saturday that preparations for resuming the work are underway.

"We have already secured the required funds to restart physical work on the project, and it will begin next month," Khannabha said.

When asked about the funding sources and total amount, Khannabha said the funds are coming from multiple sources, including various countries and institutions. However, he chose not to disclose specific details or the total amount. 

He further mentioned that about 75% of the project work has been finished, and the funds secured will adequately cover the remaining tasks to complete the project successfully.

However, a senior official from First Dhaka Elevated Expressway Company said the company expects to secure nearly $950 million. 

"Our target was to raise over $950 million in funds, although we may receive slightly less," the official stated. He added, "We are currently awaiting confirmation letters from all investors, which are expected shortly. Once received, the exact amount will be officially disclosed."

When questioned about why such a substantial amount is being raised for only 25% of the project completion, given the total budget of $1.13 billion for the 19.73 km project, the official clarified, "The funds are not solely for physical construction but also for settling past obligations such as debt repayments and adjustments."            

Regarding the project timeline, Managing Director Bhaskon expressed optimism, saying, "We hope that after resuming work in August, the project will be completed by the scheduled deadline in June 2025."

The construction of the expressway, linking Hazrat Shahjalal International Airport to Kutubkhali on the Dhaka-Chattogram Highway, has faced multiple delays, leading to an extension of the project deadline to June 2025. 

This expressway project operates under a Public-Private Partnership model, with First Dhaka Elevated Expressway Company Ltd serving as the private partner. 

Italthai holds a 51% stake in the company, while the remaining 49% is owned by Chinese contractors China Shandong International Economic and Technical Co-operation Group (CSI) and Sinohydro Corporation Ltd.

As of May, the project's overall progress stood at 74.81%. However, construction is currently halted due to an ongoing dispute among the contractors.

The expressway project began in 2011 with Thai construction firm Italthai initially investing. 

Photo: Syed Zakir Hossain

Facing financing challenges, Italthai secured an $861 million loan from Exim Bank of China and the Industrial and Commercial Bank of China (ICBC) in 2019. In return, Italthai sold 49% of the expressway company's shares to the two Chinese firms.

Subsequently, due to Italthai's failure to make a loan installment payment, the Exim Bank of China and ICBC ceased loan disbursements in January this year. To resume funding, the banks directed Italthai to transfer most of its shares to CSI and Sinohydro. 

In response, Italthai initiated arbitration proceedings at the Singapore International Arbitration Center. The dispute has also entered the Bangladesh courts, with the Appellate Division extending the share transfer status quo until the first arbitration meeting in Singapore as per Italthai's request.

Meanwhile, the authorities are confident that the contractor will meet the project deadline.

Project Director AHM Shakhawat Akhtar said, "There is a hearing [the Appellate Division] on 27 August. A decision or a solution may come from the arbitration in Singapore before that. Then the full-fledged work will start, and I hope the whole project will be completed by June next year."

The main construction cost of the project is estimated at Tk8,940 crore. Under the agreement, the investor company will cover 73% of this cost, while the Bangladesh government will provide the remaining 27% as Viability Gap Funding.

The project is progressing in three phases. The first phase, from South Kawla point in the airport area to Banani Railway Station, has been completed. 

In the second phase, construction progress from Banani Railway Station to Moghbazar Railway Crossing stands at 79.59%. The third phase, from Moghbazar Railway Crossing to Kutubkhali on the Dhaka-Chattogram Highway, has reached 12.40% completion.

The total length of the expressway is 19.73 km, expanding to 46.73km including ramps. The initial segment of the expressway was inaugurated on 2 September last year. 

The following day, the 11.5km section from South Kawla to Farmgate was opened to the public. The downward ramp linking to the Karwan Bazar section was opened on 20 March this year.