Agreement in a week
The Cabinet Committee on Economic Affairs yesterday approved the Dhaka elevated expressway project paving the way for the government to sign a concession agreement with the project’s private investor.
The approval came at a committee meeting at the Cabinet Division of the Secretariat.
“It will take a week to sign the concession agreement with the bid winner,” Mosharraf Hossain Bhuiyan, secretary to Bangladesh Bridge Authority, told The Daily Star.
Bid winner Ital-Thai Development Company has to form a new entity and get it registered with the joint stock of companies to implement the 26-kilometre expressway project.
The cabinet committee asked the Bridge Authority to submit the minutes of the negotiations between the government and the bidder, which ended on Thursday, said a source in the meeting.
The bidder during final negotiations agreed to pay the government a one-time concession fee of $40 millions in addition to other financial benefits, said Prof Md Shamsul Hoque, a member of the tender evaluation committee.
The government however desired in the Request for Proposal that the concessionaire should pay it a concession fee of $25 million every year.
The bidder committed the government to providing it with other financial benefits that include 37.5 percent corporate tax of the income from the expressway, 15 percent VAT on every toll transaction and 11 percent customs duty on imported materials.
It also agreed to pay the government Tk 87 crore for transfer of technology. A part of the amount will be spent to set up an engineering institute to impart training on the new technologies to be used in the construction, said Prof Hoque.
The technical teams involved in tender evaluation opted for box type construction of the expressway, for which Ital-Thai offered a cost of Tk 8,703 crore.
The government has agreed to provide 27 percent of the construction cost as Viability Gap Fund from its Public Private Partnership fund.
The concessionaire has to start the construction work in three months after issuance of the work order and complete it in three and a half years.
The proposed route of the expressway starts from Shahjalal Airport via Kuril, Banani, Tejgaon, Moghbazar and Kamalapur Stadium along the existing railway track. It then runs through Gulbagh across the Demra road up to Kutubkhali via Dania.
Ital-Thai has agreed to a standard toll of Tk125 for a car from one end to the other and Tk100 for partial use of the expressway.
A public bus has to pay double the standard rate, a six-wheeler truck four times and any vehicle larger than that five times. Motorbikes will not get access to the facility for safety reasons.
The expressway will be handed over to the government after 25 years of concession period.
