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The hurdle to resuming the construction of the Dhaka Elevated Expressway's (DEE) unfinished part is expected to be over after nearly a year with the completion of the formalities of transferring all the shares of First Dhaka Elevated Expressway (FDEE) Company Limited, the investment company behind the project.
The shares will be transferred from the majority shareholder, Italian-Thai Development (ITD) Public Company Ltd, to two Chinese firms - China Shandong International Economic and Technical Cooperation Group (CSI) and Sinohydro Corporation Ltd.
Officials said ITD, which owned 51 per cent of the shares, has already handed over 99 per cent of its holdings to the Chinese firms, complying with a verdict given by the Singaporean International Arbitration Centre (SIAC) last year.
They also said time is needed to complete the transfer of shares and reconstitute the FDEE board, which are necessary to have funds released from Export-Import Bank of China (EIBC) and Industrial and Commercial Bank of China (ICBC).
The two banks halted funds early this year after the ITD's failure to pay loan instalments several times.
"We expect construction to resume by this month and continue in full swing with no major obstructions," said DEE Project Director AHMS Akter.
He said fund crunch, the project's major barrier, is over as the SIAC verdict went in favour of the Chinese companies.
According to Bangladesh Bridge Authority (BBA), the implementing agency of the country's first expressway project taken under the public-private partnership (PPP) modality in 2011, CSI now owns 80 per cent of the FDEE shares while 19 per cent belongs to Sinohydro.
Earlier, ITD sold 34 per cent of the shares to CSI and 19 per cent to Sinohydro to get $861 million from EIBC and ICBC.
ITD, the private partner of the project, could not manage its committed $1.2 billion till 2020 due to various problems. It finally sold 49 per cent of the shares to the Chinese companies in 2019.
BBA signed the project deal for 25 years with ITD, which was supposed to complete the construction three and a half years after the commencement of the concessionaire period. The period came into effect on January 1, 2020.
Though ITD and its two Chinese partners continue to face problems in carrying out construction in the project's approved alignments near Khilgaon and Hatirjheel due to objections raised by various government agencies and environmentalists, the 11km stretch of the 19.7km expressway was inaugurated in September 2023.
BBA officials claimed all other problems, except for share transfer and fund release, are over after redesigning the alignment near the Khilgaon flyover and the Panthokunjo park near Pan Pacific Sonargaon Dhaka.
The project director also told The Financial Express the 25 per cent pending construction work would be completed by December 2026 after evaluating the entire situation.
There would be no further problems once work resumes, he said.
ITD, as the first private partner of FDEE, has already spent a good amount of money from its equity since the concessionaire agreement was signed in 2011.
As a result, SIAC allowed it to be on the company's board with a small percentage of shares.
The arbitration was necessary as the two Chinese companies started claiming their shares as per the agreement signed between the three parties in 2019.
According to the agreement, if any of the guarantors fails to pay the due interest in due time, another will pay it and the defaulter will adjust its share with the two others within five working days.
CSI and Sinohydro repaid their loans in time, but ITD could not. When they repaid ITD's loans and sought their due shares as per the agreement, ITD lodged a complaint, first with a Bangladeshi court and later with SIAC.
The SIAC hearing finished in October 2024, and the verdict was given.
FDEE has already started earning from the 11km section from Dhaka airport to Tejgaon and FDC. The section was opened to traffic in September 2023.
So far, the expressway has generated Tk 2.27 billion from a traffic count of 27.72 million vehicles.
The present progress of the project's first part is almost 100 per cent while it is 8.51 per cent for the second one.
Besides, the progress of the third part, from Moghbazar to Kutubkhali on the Dhaka-Chattogram highway, is 12.40 per cent.
The overall construction progress is 75.25 per cent.
smunima@yahoo.com