Third Terminal: Costs to Rise by Tk 9.02 Billion Despite 99.91% of Work Being Completed

❐ BD Digest Desk

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Despite the terminal building being fully constructed for passenger traffic and a ‘soft opening’ of it, the authorities have failed to fully launch the third terminal of Hazrat Shahjalal International Airport in the last three years. On the contrary, an unwanted initiative has been taken to increase the additional cost by Tk 902 crore even after almost 100% of the entire project has been completed.

A 6-year project is being completed in 11 years: The cost has exceeded Rs 22,000 crore!

At the same time, the process of increasing the project duration by another year is underway. As a result, the initial project cost of 13,610 crore taka has finally jumped to 22,267 crore 67 lakh taka.

In other words, the scheduled 6-year period is turning into a long 11 years. It is worth noting that the first phase of the expansion of Hazrat Shahjalal International Airport was approved in 2017 with the aim of modernizing the country’s aviation sector and upgrading it to international standards.

The construction of the third terminal began under the said approval. Initially, the cost of this mega project was set at Tk 13,610 crore and the final implementation deadline was set to June 2022.

However, due to the inability to complete the work on time, the first phase was rescheduled for a 3-year extension until June 2025.

Later, the deadline for the second term was extended by another year to June this year, although the work was not completed. Currently, a proposal has been made to extend the implementation period by another year to June 2027 for final approval by the Planning Commission.

The official document of the project says that the actual progress has been 99.91 percent as of June this year. That is, less than 1 percent of the work remains to be completed. Yet, on the pretext of this nominal part, they are getting unnecessary new increases in money and time.

The Civil Aviation Authority of Bangladesh (CAAB) has sent the 3rd amendment proposal to the Planning Commission, requesting an increase of another Tk 902 crore to Tk 22,267.67 crore. The additional cost over the original estimate stands at Tk 8,657.19 crore.

Along with the unbridled increase in cost and time, there is a huge delay in commissioning the building. On October 7, 2023, the then Prime Minister announced the ‘soft opening’ of the third terminal and assured that the entire operation would start gradually.

But even after three years, the terminal has not seen full-fledged operations. In this situation, Civil Aviation and Tourism Minister M Rashiduzzaman Millat has announced the decision to hold a new ‘soft opening’ on December 16.

He also said that the signing of the agreement with the operating Japanese company will be completed by September.

Even though the terminal building infrastructure has been constructed, the state is having to pay the price for the slow pace of appointing an operator. The third amendment has included a new proposal to allocate 667 crore 48 lakh taka for the maintenance of the building alone. This huge amount of money will be spent from the allocation until the appointment of the operator is completed.

It is noteworthy that the original Development Project Proposal (DPP) did not have any such funding allocation for maintenance, but this heavy burden was added towards the end of the project.

Finally, the Japanese Sub-Working Group has recently submitted technical and financial proposals to take over the management and maintenance of the terminal. Representatives of the company formally submitted their proposal at the Bebichok headquarters on August 25. Now, after evaluating the proposal, the authorities will move towards a final agreement through negotiations and negotiations.

Even at the very last stage of the project, the construction cost of civil works and other sectors is being increased. The new proposal has demanded an additional expenditure of 647.52 crore taka for the physical infrastructure of the runway and taxiway under civil works and 372.94 crore taka for building works.

In addition, a request has been submitted for an additional allocation of Tk 41.67 crore by extending the period of 359 person-months of consultancy services. However, on August 20, the Planning Commission’s Project Evaluation Committee meeting gave strict instructions to cut off the additional expenditure.

Questions have also been raised about the unjustified huge amount paid to the contractor. A dispute board was formed to resolve various disputes between Bebichak and the project’s contractor, Aviation Dhaka Consortium (ADC).

The board ruled in favor of the contractor on February 16. Following this, the ‘Omicable/Global Settlement Committee’ was formed on April 7 to settle the claims. Based on their recommendations, a controversial decision was made to pay the contractor an additional Tk 1,522.55 crore.

The matter of waiver of another 1,579.51 crore taka of outstanding bills of the contractor company and a fine of 47 crore taka has come to light as per the verdict of the Dispute Board. From the beginning, there were widespread allegations of ambiguity and changes in the original design of the project, scope of work and detailed specifications of the equipment.

According to experts, these technical ambiguities are the main reason why the cost of the project skyrocketed towards the end.

The financial management of the project has already raised many questions. The CAG audit has raised strong objections to over-allocation, VAT evasion and irregularities in the release of goods. The audit has even raised allegations of sensational theft such as showing the transport costs for drying the liquid clay twice.

In addition, there are allegations that the contractor’s unfair claim against the NBR’s VAT was paid to the state. The audit found evidence that 687.2 million taka for the port’s goods clearance was imposed on the state instead of being paid to the contractor.

Not only is there money laundering, but there are also serious doubts about the technical capabilities of the entire structure. A serious technical fault has been detected in the highly sensitive ‘Explosive Detection System’ (EDS) machines of airport security. When the power goes out, these machines take at least 20 minutes to restart, which is a serious insecurity in international aviation.

In addition, the backup power system is on the verge of failure due to the lack of proper load calculation and UPS configuration in the tender process. Water and mud had entered the ‘duct bank’ prepared for the electronic lines, and there are also long complaints of poor quality products being supplied in violation of the original specifications.

Amidst all these discrepancies and corruption, 121 audit objections of the project are still unresolved. The documents confirm that these objections have arisen due to the extreme laxity of the supervision system and weak financial management in the implementation of the project. The Implementation Monitoring and Evaluation Department (IMED) has urged the auditor to resolve these accumulated audit objections as soon as possible.

The 3rd Terminal of Hazrat Shahjalal International Airport is a very important milestone for the overall economy and air connectivity of the country. Despite the skyrocketing promise of ensuring world-class services to international passengers, the fact that this infrastructure has been in place for years has become a source of great disappointment and concern for the country.