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The Financial Express

DEE project: Thai investor finally sells 49pc share to two Chinese cos

Two deals signed


FE Report | Published: February 26, 2020 10:05:17 | Updated: March 01, 2020 17:59:37


FE file photo FE file photo

The troubled-road infrastructure project sees a hope long nine years after the contract was signed to build elevated expressway in the city under public-private partnership as its Thai investor finally sold almost half of the company's share to manage funds.

The Italian-Thai Development PLC, the main investor of the Tk 89.40-billion Dhaka Elevated Expressway (DEE) project, sold 49 per cent share of First DEE Company Limited to two Chinese companies as it couldn't manage 42 per cent investment fund.

According to the contract signed between Bangladesh Bridge Authority (BBA) and private investor Thai in January 2011, the government will bear 27 per cent of the cost as viability gap funding (VGF) while 31 per cent will come from the company as equity.

Though the company was supposed to submit a financial closure to state source of its rest 42 per cent fund, it could not manage it as the DEE project was not designed properly.

According to the project office sources, China Shandong International Economic and Technical Cooperation Group and Sinohydro Corporation Limited will now own 38 per cent and 15 per cent shares of FDEEC respectively as they managed funds from two Chinese banks.

Under this arrangement, China Exim Bank will provide Tk 38.18 billion and Commercial Bank of China Tk 34 billion, according to loan agreements signed on March 30, 2019.

BBA on Tuesday signed an agreement to make the loan deal effective in presence of Road Transport and Bridges Minister Obaidul Quader. Another agreement was also signed between the investor, lender and Finance Division of the Ministry of Finance to provide VGF.

BBA Executive Director Belayet Hossain, Managing Director of Italian-Thai Monchai Musicabud and Nadia Mariam of Citibank NA signed the direct loan agreement on half of the investor, lender and grantor.

Additional Secretary Ekhlasur Rahman, Monchai of Italian-Thai and Nadia Mariam of Citibank signed VGF agreement on behalf of Finance Division, lender and investor.

Addressing on the occasion, the RTB Minister said with signing of the deals, problem over the implementation of the DEE project has been over.

"We have been in trouble in funding the project for long time. Many quarters have so far questioned about the future of the project. Now it is over," the minister said, adding that the construction work of the DEE continued despite fund crisis. EXIM Bank and ICBC have informed that they will start releasing funds next month, he said.

The executive director said though the construction of the DEE has been claimed to start in 2015, its construction, in fact, began in April last year due to lack of funds. Now DEE is no more a sick project, he claimed.

Among others, Thai Ambassador Arunrung Phothong, BBA Chief Engineer Quazi Ferdous, and Project Director of Padma Multipurpose Bridge Project Shafiqul Islam were also present.

smunima@yahoo.com

 

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