Expansion of Dhaka-Sylhet Highway: Govt opts to use own resources

The roads authority is going to expand the 214-kilometre Dhaka-Sylhet Highway into four lanes using their own resources following failed negotiations with a Chinese company.

Road Transport and Highways Division (RTHD) sent a proposal to the planning ministry in the first week of this month in this regard without notifying Beijing or even the Economic Relations Division (ERD), a government organ which worked to arrange the funds from China.

The Dhaka-Sylhet four-lane highway project is one of the 26 projects for which China had committed to provide a $21.5 billion soft loan. A memorandum of understanding (MoU) between Dhaka and Beijing was signed during the Chinese president's visit to Dhaka in 2016.

The road authority's recent decision would be considered a violation of the MoU as they had not settled the issue diplomatically with Beijing. It might also have adverse affect on several other deals Dhaka had signed with Beijing, ERD officials said.

Earlier, Chinese firm China Harbor Engineering Company Limited sought Tk 17,000 crore in construction cost of the highway. The amount was exclusive of other costs, including of land acquisition.

The Chinese firm then allegedly offered a hefty bribe of $70,000 to the then newly appointed secretary of the road transport Nazrul Islam to green-light the work at the inflated cost, sources said. Islam did not take the bribe and instead returned it through the Chinese embassy in Dhaka.  

As per RTHD's proposal, the cost of the project which includes--elevating the highway into four lanes from Kanchpur in Dhaka to Sylhet including service lanes on both sides-- has been estimated at a lower Tk 11,412 crore.

A planning ministry official said the proposal would be placed before the project evaluation committee (PEC) and once it was approved, it would be placed in the meeting of Executive Committee of the National Economic Council (Ecnec).

As per the new plan, the project would be completed between April 2018 and December 2022. The 214 kilometres will have 321 culverts, 70 bridges, five railway overpasses, four flyovers, 10 underpasses, 42 footbridges, three truck stands and two rest houses, officials said.

The aim of the project was to expand regional transport network, including the Asian Highway Network, Bistec and Saarc corridors, to bring mobility in trade and industry, they said.

But as per the earlier plan, China selected China Harbor Engineering Company Limited for the Dhaka-Sylhet Highway project and asked Bangladesh to sign a commercial contract with the company in 2016.

On October 9 of the same year, the government signed a primary deal with China Harbor and after which the negotiation process started for a commercial contract.

However, Finance Minister AMA Muhith, at a programme in this January, said the company had been blacklisted as it had bribed a government official.

Muhith had then said they would now implement the project with the government's own finances.

However, RTHD officials claimed the government had to fund the project from its own resource as the negotiations with company had fallen through.

Belayet Hossain, additional secretary of RTHD, said their negotiation with the Chinese firm failed as they had quoted a high price.

An official of the division said the Chinese company first sought Tk 17,000 crore in construction cost. At one stage of the negotiations, they lowered the amount to Tk 10,000 crore but the ministry said they would not provide more than Tk 9,000 crore.

For this, the official said China Harbour gave the bribe money “as a gift” to the secretary of the ministry in November last year.

Belayet on May 9 told The Daily Star, “We have already sent the proposal to the planning ministry for implementing the project with their own fund.”

He, however, admitted that no formal letter had been sent to the ERD or the Chinese embassy in this regard. “They are aware of the matter,” he claimed.

ERD officials, on the other hand, said if the project was implemented using RTHD's own resources and without settling the issue diplomatically, it would be a violation of the conditions of 2016's MoU.

According to the provision of the MoU, any question or dispute arising from the interpretation and implementation of a project shall be resolved through friendly negotiations using diplomatic channels.

The officials also said it might also complicate the method of implementation of the other loan deals signed with Beijing under the MoU.

They, however, said if the matter could be solved through diplomatic channels, the unused funds could be diverted to other projects.

Sources at the planning ministry said although Muhith said China Harbor was blacklisted, no such information was found in the debarment list of Central Procurement Technical Unit (CPTU) of the ministry.