B Mirror Report : The dispute surrounding the costly third terminal project of Hazrat Shahjalal International Airport (HSIA) is expected to persist, as only the initial phase of hearings on the contractor’s allegations has recently concluded.

According to sources, members of the dispute board have completed the first round of hearings on the claims submitted by the Aviation Dhaka Consortium (ADC), which visited Bangladesh on January 12 and 13. This hearing took place after more than one and a half years of efforts to initiate the dispute resolution process.

The dispute board is scheduled to deliver its decision on February 9. However, several unresolved matters remain, indicating that the conflict between the contractor and the government is far from settled, as attempts to resolve the issues amicably have failed.

The contractor has raised numerous complaints regarding unpaid dues and additional costs, allegations that the Civil Aviation Authority of Bangladesh (CAAB) has rejected, terming them unreasonable and illogical. On the other hand, CAAB has lodged multiple counterclaims against the contractor, including accusations of breaching contractual obligations.

Officials said the three-member dispute board constituted by the International Chamber of Commerce with the consent of both parties held discussions with representatives from ADC and CAAB regarding the contractor’s claims and collected relevant documents from both sides.

They added that CAAB may opt for arbitration if it does not agree with any decision given by the dispute board. If the verdict is accepted, the board is expected to proceed with hearings on the government’s claims.

The dispute resolution process began after CAAB undertook several works outside the approved scope, particularly ahead of the soft opening of the third terminal under the previous Awami League government.

A major point of contention revolves around the construction of two pier stations on either side of the terminal building, which were not included in the approved Development Project Proposal (DPP). The contractor reportedly initiated the work based on verbal instructions from senior officials towards the end of the project.

These additional pier stations were intended to increase aircraft boarding capacity through passenger bridges, although they were not part of the original contract or DPP.

CAAB sources said the work was eventually halted following a study by the International Finance Corporation (IFC), which revealed that the contractor’s quoted cost was nearly three times higher than expected. One source noted that ADC had submitted around 400 claims, with disputes escalating after the contractor proposed significantly inflated costs for extension works.

Moreover, a post-completion review of the Tk 213.99 billion project uncovered several deviations, including changes in the country of origin of high-value equipment and materials, contrary to tender specifications.

Regarding the timeline for resolving the dispute, a CAAB official said that since the dispute board has already been formed and the first phase of hearings completed, the remaining steps may not take much longer.

However, he cautioned that any major decision especially one involving acceptance of a verdict in favour of the contractor would likely require approval from higher authorities, including the cabinet.

“If either party rejects the verdict on the contractor’s claims or the government’s counterclaims, arbitration remains an option,” the official said on condition of anonymity.

The ADC, a joint venture of Japan’s Mitsubishi and Fujita and South Korea’s Samsung, signed the contract on August 23, 2020. The Executive Committee of the National Economic Council (ECNEC) approved the original DPP on October 24, 2017, and the revised version on December 10, 2019.

Although construction work was completed, the third terminal was given a soft opening on October 7, 2023, ahead of the 2024 national elections under the Sheikh Hasina-led government.