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Opening of Hotel Intercon

Design hiccup causes delay, raises cost

Sarwar A Chowdhury
After the renovation work of the state-run Ruposhi Bangla Hotel started in March last year, a big problem arose. Architects found it difficult to continue the work as planned.
The original design of the 11-storey building remains traceless for long. So after the decision for renovation, the authorities carried out a survey and prepared a rough design based on certain common assumptions. The guesswork, however, turned out to be flawed during the demolition of the structure.
"It was only at that time (demolition] that it was established that some of the designs [by the architects] did not match the onsite conditions and hence some re-design was required," said James P McDonald, general manager of InterContinental Dhaka, the new operator of the five-star hotel.
The hotel was supposed to reopen this month as InterContinental Dhaka. But because of the delay, it would now take at least six more months and cost an additional $20 million (Tk 160 crore).
McDonald expects the renovation will be complete in the first quarter of 2017.
The building was constructed by an American firm in 1966.
A host of problems arose when the previous rooms and other structures were demolished. Commenting on the additional costs, McDonald said: "There is no expected escalation of cost as a result of the extended time, since we are operating 'milestone' contracts for the tendered works."
The only hike in budget from the original estimates is as a result of an increase in the scope of works as agreed by all the parties as well as some costs related to national and global inflation affecting the cost of materials, he added.
Under the original plan, the renovation was to take 16 months and cost $50 million orTk 400 crore.
The renovation, which is part of a 30-year management deal signed in February 2012 between Ruposhi Bangla's owner, the state-run Bangladesh Services Ltd, and InterContinental Hotels Group, was to start on November 1, 2014.
But due to a wide gap between the price quoted by the lowest bidder and the estimated cost, the authorities failed to wrap up the tendering process in time.
However, the issues were settled later through negotiations.
The hotel was shut on September 1, 2014, for early preparation such as asset and equipment disposal and rearrangement and transfer of employees.
InterContinental had earlier run the iconic Dhaka hotel from 1966 to 1983, after which Sheraton took over. Its contract ended in December 2008 but the government requested it to continue the operations until April 30, 2011, for the ICC Cricket World Cup.
Starwood, the parent company of Sheraton, gave Bangladesh Services Ltd a conditional extension offer in 2009, but there was a disagreement between the two sides over the renovation cost and the fate of the employees.
Eventually, Bangladesh Services took over the hotel's operations, renaming it Ruposhi Bangla Hotel.