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Koko-linked New Mooring Port Project

Tk 57cr loss over delay by Chinese company

Abdullah Al Mahmud in etgand SlIARIER KHAN in Dhaka
The China Harbour and Engineering Company Ltd, which bribed Arafat Rahman Koko and other influential persons of the four-party alliance government to get the New Mooring Container Terminal (NCT) Project, inflicted a loss of Tk 57 crore on the country by failing to complete the project in time.
The Chittagong Port Authority (CPA) had to bear the loss as China Harbour failed to complete the project by August 16, 2006. China Harbour handed over the project to the CPA in an incomplete state in December 2007.
Following a tender in July, 2003, the CPA signed an agreement with China Harbour on January 29,2004, for constructing the NCT at a cost of Tk 331.99 crore payable in US dollars and local currency. China Harbour actually realised Tk 388 crore as construction cost before handing over the project in December 2007, sources said.
Project officials, however, claim that they "were not aware of any underhand dealings" in the project, and that the loss would be Tk 37 crore since China Harbour had quoted a price of Tk 351.99 crore for the job. Project Director engineer Khademul Basher says that when the
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FROM PAGE 1 bid was opened in July. 2003, the cost stood at Tk 331 crore considering the-then exchange rate of US dollar. But the construction cost rose to Tk 351 crore as prices spiralled when China Harbour started work in February, 2004.
They also blame delays in land acquisition process which affected China Harbour's performance and made the CPA to count the additional cost. Such blames are aimed at the former additional deputy commissioner (Land Acquisition) of Chittagong.
Sources said the CPA had handed over 41 out of 55 acres of land to China Harbour in February 2004, which was as per the schedule. The CPA handed over the remaining .14 acres by April 22, 2006 as that had to be acquired through compensation. Acquisition and compensation money was handed over to the people affected on June 18,2005.
The Daily Star in November 2006 reported that China Harbour was resorting to various excuses to justify delays of the project.
According to sources, the CPA floated the tender for implementing the NCT project in October, 2002, and China Harbour got the construction workas the "lowest bidder".
The Chinese firm quoted Tk 331 crore 99.83 lakh payable in US dollars and taka. As per the agreement, China Harbour was to be paid S 32.9 million (which was equivalent to Tk 174.99 crore at that time when exchange rate of dollar stood at Tk 52.88) and the remainingTk 157 crore in local currency.
After signing the contract, China Harbour started con-
struction work on February 14, 2004, scheduled to complete work by August, 2006. On September 2, 2006, the CPA received only three berths and a 60,000-square-metre containeryard.
Put under operation the next day, this partial facility offered a storage space of 7,000 TEUs (Twenty Equivalent Units) containers with an annual handling capacity of 2.5 lakh containers, said Project Director Khademul Bashar.
China Harbour completed construction of the remaining two berths and expanded the container yard. This raised the annual handling capacity of the NCT to 5.5 lakh TEUs in December, 2007. It, however, did not construct a number of gates and entrances.
By the time the NCT was handed over to the CPA, the total implementation cost of the project stood at Tk 503 crore, including the construction cost that rose to Tk 388 crore, with the exchange rate of dollar standing at Tk 70 and the portion payable in dollar at Tk 230.30 crore (from previous Tk 174.99 crore), Khademul Bashar added.
The project director put the blame on delay in land acquisition, which lies with the additional deputy commissioner (Land Acquisition), for hampering the progress of construction work and causing the CPA to count the additional cost.
He pointed out dial Tk 4.19 crore had been deducted for the few incomplete jobs.
He found the deducted amount to be adequate for the incomplete work, which includes construction of five entrances, two gates- one in
front of the NCTWorkshop and the other at the entrance to the New Mooring-and a road that has to be relocated for bypassing the container yard requiring further expansion.
Besides the construction cost of Tk 388 crore, over Tk 80 crore was spent on land acquisition, Tk 22 crore for consultancy fees and the rest of the total Tk 503 was spent for logistics, salaries and other costs, said sources in the CPA.
ALLEGATIONS
An underhand dealing was alleged to have taken place in awarding the construction work to China Harbour. As the two former chairmen and two members of the CPA, concerned with the project, were either retired or were abroad they could not be reached.
There was another allegation of not opening tender of one of the three qualified bidders in order to award the project to China Harbour.
Out of nine bidders participating in the tender, the French consultancy firm BCOM and Associates identified tliree as qualified ones, sources said.
The firms were China Harbour, Korea-based joint investment agency of Hyundai-Mir Akter Hossain Ltd and Sweden-based Scanaska-NEC-JVLtd.
The tender was opened on July31.2003.
CPA Member (Planning and Administration) Md Hadi Hossain Babul said, "We do not know about any underhand dealings. The CPA was responsible for implementation of the project and it was done successfully and maintaining transparency," hesaid.
Asked about the tender
documents of Scanaska-NEC-JV, Hossain said it was not opened on security grounds following reports from an intelligence agency.
OTHER CONTROVERSY
The CPA was desperately trying to award China Harbour a river dredging project with a grossly inflated budget in November 2006-even after the four-party alliance government had handed over power to the President lajuddin Ahmed's care take r government.
In a fast-track "restricted" tender in May, 2006, China Harbour wras selected the best bidder even though it had sought a price ofTk 252 crore to do the job against an approved budget of only Tk 74 crore. The CPA could not award the bid to China Harbour as the Chinese company at that time could not ensure any dredger for the job and backed off.
By the time China Harbour was ready to take the job, the BNP-led four-party alliance government had handed over the power to President lajuddin Ahmed's caretaker government. With alleged full control over that government, the Hawa Bhaban succeeded in making the CPA inflate the cost for the Karnaphuli dredging project by a staggering 345 percent to Tk 255 crore from an approved budget ofTk 74 crore. The bid eventually fell flat.
This project was being undertaken to facilitate building of the third Karnaphuli Bridge The bridge is being built by another Chinese company China Major, which was awarded die project along with a faulty design under pressure from lobbyists of Hawa Bhaban.