Elevated expressway work lies stalled as foreign contractors squabble over shares

Expected to resume in August, construction of the Dhaka Elevated Expressway remains stalled over funding issues as its foreign contractors have yet to resolve their share dispute.

The Bangladesh Bridge Authority (BBA), the project's implementing agency, has expressed concern that if these delays persist, it may be unable to meet the June 2025 completion deadline.

It has urged the contractor, First Dhaka Elevated Expressway Company Limited (FDEECL), to resume work immediately, warning that penalties will be imposed if deadlines are not met.

Project Director AHM Shakhawat Akhtar said the authorities are exerting pressure on the contractor for the work to be resumed quickly. "We have informed them that the project deadline of June 2025 will not be extended."

He stated that 75% of the project has already been completed and if the remaining 25% is worked on in three shifts, the project can still meet its deadline, noting that penalties will be imposed if the deadline is missed.

Inaugurated in April 2011, the project has an estimated construction cost of Tk8,940 crore, with the expressway company covering 73% and the Bangladesh government funding the remaining 27%. Italthai initially formed First Dhaka Elevated Expressway Company Limited to construct and manage the expressway.

However, facing financial troubles, the company in 2019 secured an $861 million loan from Exim Bank of China and the Industrial and Commercial Bank of China, selling shares of the expressway company to Chinese contractors China Shandong Economic and Technical Cooperation Group (34%) and Sinohydro Corporation Limited (15%) in exchange.

However, after Italthai missed a loan payment, the banks froze disbursements in January 2023 and demanded that Italthai transfer the majority of its remaining shares to the Chinese contractors, prompting Italthai to initiate arbitration proceedings at the Singapore International Arbitration Centre.

Project Director Shakhawat Akhtar said they are awaiting the outcome of an arbitration hearing, scheduled for early October. "We hope the dispute will be resolved at the hearing." 

Efforts to contact Bhaskon Khannabha, managing director of the expressway company, were unsuccessful, with his office indicating he is not currently willing to discuss the matter. The phone was found switched off as well.

Earlier in July, Khannabha told TBS that the company had secured funds and that construction work would resume in August. However, as September comes to a close, work remains stalled.

An official of the First Dhaka Elevated Expressway Company explained that although fundraising was progressing, the student protests in July, along with the change in government, caused investors to hesitate.

During the unrest, the Banani toll plaza was set on fire on 18 July, followed by an attack on the Mohakhali toll plaza on 19 July. This raised concerns about security and further delayed investment, the official added.

The official also criticised the Bridge Authority's warnings, saying, "This is a PPP project, and private firms always aim to complete their work as quickly as possible. The government is also a partner in this, and they should not behave like this."

Meanwhile, the matter also went to court in Bangladesh, where the Appellate Division lifted the stay on share transfers among the project's contractors on 1 September, removing any obstacles to the transfer of shares. 

Previously, Italthai had filed an arbitration case in the High Court, which ruled on May 12 to lift the stay and dismissed Italthai's appeal. In response, Italthai filed a leave to appeal in the Appellate Division against that ruling.

The total length of the Dhaka Elevated Expressway is 19.73km, extending to 46.73km including ramps.

The first segment of the expressway was inaugurated on 2 September 2022, with an 11.5km section from South Kawla to Farmgate opened to the public the following day. The ramp connecting it to the Karwan Bazar section was opened in March 2023.