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Shahjalal airport upgrade costs to climb

Sayeda Akter
The government is set to extend the duration and budget for upgrading Hazrat Shahjalal International Airport by another two years, which will increase the project costs by nearly 65 percent now.
Initially, the project cost was estimated at Tk 328 crore to upgrade the airport by June this year, while the rescheduled cost finalised by the new bidding stands atTk 540 crore.
The Civil Aviation Authority of Bangladesh (CAAB) intended to complete the project to make the country's first international airport meet safety requirements set by the International Civil Aviation Organisation (ICAO).
Now, the CAAB has to redesign the entire project that needs to revise the project duration and budget further, said a letter sent by the CAAB to the civil aviation and tourism ministry in April.
The ministry then agreed in principle to consider allowing an extension of two years to the project depending on getting approval from the Mixed Credit Division of the Danish International Development Agency (DANIDA) that funds the project.
US Federal Aviation Adminis-
tration (FAA) listed the CAAB in category-2 in 2006 due to a lack in ensuring minimum safety standards, which eventually forced the government to suspend the Dhaka-New York route.
Also, the ICAO included Bangladesh in the list of countries having Significant Safety Concern (SSC) in June 2009, after it identified a series of irregularities, including issuance of Air Operator Certificates (AOC), and a lack of safe air operations as per international standards.
Now the ministry and CAAB are seriously trying to get out of the stigma and upgrade own status to category-1 by meeting all necessary safety standards, where upgrading the airport is a must, said officials.
The project was first taken in 2001 to upgrade the country's biggest airport's capacity to handle heavy aircrafts, such as Boeing that need a wide and sturdier runway and taxiway.
The modernisation project includes re-constructing the existing taxiway to make a highspeed taxiway and modernising the drainage system. Procurement of equipment for maintenance, visual guidance and radio communication, primary and secondary radar are also included
in the project.
In addition, under the project, some construction works, including extension and development of operation building and refurbishing the transmitting buildings were also incorporated.
In 2006 the Bangladesh government and DANIDA signed an agreement on providing technical assistance to the CAAB to implement the project, and a country-to-country agreement was signed in 2008.
In 2009, the CAAB called a bidding to find contractors for the construction work of the project, and finalised selecting a Danish company as per the conditions set by the Danish Mixed Credit Policy.
The Executive Committee of the National Economic Council (Ecnec) approved an estimated cost of Tk 328 crore, of which the DANIDA was supposed to provide the major portion to complete the project.
However, the company demanded a 17.5 percent increase from the actual rate, as the bidding validity period expired by then, and thus the ministry cancelled the bidding.
Later, the CAAB called a second bidding and reached an understanding with another Danish company, which asked Tk 276
crore more than the previously settled cost. The government has to pay nearly Tk 64 crore as duty andVAT.
Now, the CAAB is set to pay nearly double to upgrade the airport, and requested the ministry to give an extension to the project duration and also requested the DANIDA to increase budget allocation accordingly.
Although, the parliamentary standing committee on the civil aviation ministry asked the CAAB to complete the tasks by September, extending two months beyond its actual deadline set by the government.
GM Quader, civil aviation and tourism minister, said the project was delayed mainly due to some impediments caused by both parties.
“It took some time to complete the formalities on both sides — the CAAB and DANIDA. Now the CAAB has to revise the designs of the entire upgrade project to meet the requirements set by the ICAO," the minister said.
“As per the new design, the work volume has gone up, and an increased budgetary allocation is needed,” he said. “But everything will depend on the approval of Ecnec and DANIDA.”