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A Chinese bank said it would not finance the project if the shares were not transferred from an Italian-Thai company to a Chinese concern, a lawyer said
Published : 16 May 2024, 01:40 PM
The Appellate Division has stayed the handover of shares in the Dhaka Elevated Expressway from an Italian-Thai company to China’s Sinohydro Corporation for two weeks.
As a result, construction work on the Dhaka Expressway has been halted temporarily, a lawyer said.
An eight-member bench of the Appellate Division led by Chief Justice Obaidul Hassan made the decision on Thursday.
Advocates AM Amin Uddin, Sheikh Mohammad Morshed, Imtiaz Faruk and several others stood for the Italian-Thai company at the hearing while Advocates Mohammad Mehedi Hasan Chowdhury and Mostafizur Rahman Khan represented the Chinese company.
“The Appellate Division has yet to receive the judgment of the High Court,” Mehedi Hasan told the media after the hearing. “They have issued a two-week status quo until the judgment is received. In two weeks, the case will be put on the cause list of the Appellate Division for a hearing.”
“As the shares will not be handed over at this time, the bank said it will not finance the construction, meaning that the work will be halted.”
Mehdi Hasan said that in 2013, the Bangladesh government gave a work order to the Italian development company to build the elevated expressway. But when they failed to start work, they formed a joint venture with two Chinese companies.
The three companies jointly took out the loan for the project. There was a condition that if any of the partners failed to pay the interest on the loan in January or June, that part of the interest would be paid to the other two guarantors and the shares of the company that failed to pay the interest would go to the rest. The Bangladesh government also approved the condition.
Mehdi Hasan said the Italian-Thai company failed to pay the interest on the loan in 2023. For that reason, when the Chinese bank that gave the loan wrote to the Italian company on Jan 23, 2024, they went to arbitration.
“In view of that arbitration, they filed a case in the High Court Division to stay the transfer of shares. The High Court dismissed the case as 'not acceptable'. Then they took the matter to the Appellate Division."
The main length of the Dhaka Elevated Expressway is 19.73 km. Including ramps, the total length will be 46.73 km. When the entire project is completed, there will be a total of 31 ramps for vehicles on the expressway.
Prime Minister Sheikh Hasina inaugurated the first section of the expressway on Sept 2 last year. The next day, the 11.5 km section of the airport from Kawla to Farmgate was opened to traffic. Later, the connecting road or down ramp to the Karwan Bazaar (FDC) section was opened on Mar 19 this year.
The estimated budget for the project is over Tk 89.4 billion. The government is paying Tk 41.38 billion of the cost.
The Italian Thai Development Public Company Limited was to pay 51 percent, China Shandong International Economic and Technical Group 34 percent and Sinohydro Corporation 15 percent of the remaining cost.
