Eastern Housing hit hard by Rajuk's IT breakdown

Real estate company Eastern Housing Ltd fears an increase in the cost of doing business for a wholly unexpected reason - the breakdown of the design approval mechanism of Dhaka's urban development authority.

It sought approval of the design of a project on a land of 31.3 decimals at Aftab Nagar in the capital seven months back. When it was awaiting approval, Rajuk suspended the designated software in May this year, claiming it had been hacked.

Another housing project on a land of 59.47 decimals in the capital's Hatirjeel also hangs in the balance. There is no possibility of getting the design approved within the expected timeframe, according to EHL sources.

Rajuk said it reinstated the digital system on August 21, but users have complained of difficulties navigating it.

"The situation will badly affect our company's profitability," said AKM Sahadat H Majumder, head of apartments at the EHL, adding that all land developers and real estate companies of the sector will face similar consequences due to the sloppy online mechanism of Rajuk.

That not only results in missed business opportunities but will also drive up construction costs as labourers are sitting idle.

Mr Majumder said they had already made investments and set construction plans. "The two projects will increase our liabilities and production costs."

Meanwhile, Rajuk's committee, responsible for approving designs, has not held any meeting for more than three months.

"Our investments remain stuck as we cannot sell apartments before getting Rajuk's approval of the designs," Mr Majumder said.

Realtors submit building plans online and Rajuk grants approval based on compliance with design standards, including structural, plumbing and drawing requirements. Approval is given following a meeting of the designated committee.

"But the committee did not hold any meeting after May," he said.

The situation deteriorated after May 19, when Rajuk's server was hacked, leaving realtors unable to submit plans online. The authority reinstated the server last Thursday, but it is yet to be user-friendly.

An EHL official said developers are now facing further complications in filing plans. Currently, only one plan can be submitted per phone number and national ID, with an OTP required to progress through the process. "But the process of submitting the proposal is very slow," the official said.

As a result, realtors face higher production costs due to the delays in securing approvals. Insiders said Rajuk must improve its online services by appointing qualified technical staff. Otherwise, many realtors will face losses and rising bank liabilities, as construction projects are commonly financed with loans.

EHL, an 'A' category company, reported a profit of Tk 291 million in FY20, rising to Tk 688 million in FY23 before slipping to Tk 563 million the following year.

Rajuk had contracted IT firm Dohatec for software maintenance, but the deal expired in June 2024, and no replacement firm has since been appointed. The authority has no in-house IT team, which has led to mismanagement of its online services.

On May 19, amid the breakdown, an unscrupulous group secured approval for a 15-storey building in Mirpur by manipulating the system. Rajuk later said its software had been hacked, although the group obtained approval after paying fees by credit card.

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