B Mirror Report: The Civil Aviation Authority of Bangladesh (CAAB) has suffered a major setback in an international dispute over the construction of the third terminal at Hazrat Shahjalal International Airport.

An international dispute adjudication board formed to resolve the long-running financial disagreement has directed CAAB to pay more than Tk 1,000 crore in outstanding dues to the consortium.

According to officials involved in the development project, the three-member international dispute resolution board delivered the verdict in Dhaka last week. The board was constituted to settle prolonged financial disputes between CAAB and the Aviation Dhaka Consortium (ADC).

Speaking to The Business Standard on condition of anonymity, a senior CAAB official said the payment had been withheld primarily due to audit objections.

“The dues accumulated over time, but we refrained from making payments because of audit objections,” the official said. “CAAB now has 28 days to challenge the decision. If the objections are not resolved within this period, the matter will proceed to formal arbitration, and any arbitral award will then be binding.”

Officials also said the concerned ministry will be informed in detail about the ruling, and further steps will be taken based on its directives.

The Aviation Dhaka Consortium (ADC) comprises Japan’s Mitsubishi Corporation and Fujita Corporation, along with South Korea’s Samsung C&T Corporation. The consortium was responsible for implementing the third terminal project.

The dispute resolution board made up of judges from Malaysia, the United Kingdom, and Germany issued its decision after thoroughly examining the financial claims and counterclaims of both parties.

On July 20, the ambassador of one of the consortium-member countries wrote to Bangladesh’s aviation adviser, stating that although the third terminal is a landmark in the country’s infrastructure development, unresolved financial issues have placed the project in uncertainty.

The letter noted that despite fulfilling all contractual obligations, Samsung C&T Corporation has yet to receive a significant portion of its dues.

The consortium stated that despite global challenges such as the Covid-19 pandemic and the Russia–Ukraine war, the project was completed on schedule on January 2, 2024. However, CAAB allegedly failed to make payments in accordance with contractual terms.

The ambassador further said that due to delays in appointing an operator for the new terminal, ADC has been compelled to continue maintenance work without compensation, increasing operational costs and financial losses.

In a separate communication, another ambassador expressed concern over the unpaid bills, noting that although construction has been completed, CAAB has not formally taken over the facility, leaving the entire maintenance burden on the contractor. The letter warned that failure to resolve the issue promptly could lead the consortium to pursue legal action or international arbitration.

It also cautioned that such developments could harm Bangladesh’s international reputation and negatively affect future foreign investment prospects.