Large third party commission in foreign funded development project

BTJ Desk Report
Large third party commission in foreign funded development project

Bangladesh government is implementing the Dhaka-Ashulia Elevated Expressway project with funding from China. This government-to-government (G2G) project did not involve a competitive bidding process. The Exim Bank of China is providing the loan, and China National Machinery Corporation (CMC) is the contractor.

However, a third party, the Bangladeshi firm Epic Solution, emerged in the implementation process. In 2017, CMC and Epic Solution signed a contract stating that Epic Solution would help CMC secure the project and, in return, receive a 6% commission on the construction contract value. This involvement of a third party in a G2G project is seen as unusual by infrastructure experts.

The project, approved by the Executive Committee of the National Economic Council (ECNEC) in July 2017, has an estimated construction cost of BDT 17,553 crore, with Exim Bank of China providing BDT 10,949 crore. Despite the initial agreement, CMC has not paid any commission to Epic Solution, leading to a legal dispute currently pending in the high court, which might disrupt the ongoing construction.

Epic Solution, owned by Shahed Rahman Bashir, allegedly secured the project for CMC with the help of a former secretary from the Bridge Division. The Economic Relations Division (ERD) signed the financing agreement with Exim Bank in April 2022 without involving Epic Solution.

The project director, Shahabuddin Khan, expressed concerns that the legal dispute between the agent and the contractor could delay the project. Experts highlight that such third-party involvement is atypical in G2G projects and recommend a thorough investigation to ensure transparency and prevent complications.

Dr. Iftekharuzzaman, Executive Director of Transparency International Bangladesh, noted that third-party involvement in G2G projects is inappropriate and indicates potential corruption. He emphasized the need for judicial investigation to uncover any malign activities. He also mentioned that corruption is more prevalent in Chinese-funded projects compared to other international investments.

American Enterprise Institute’s data indicates that China’s investment in Bangladesh exceeds $7 billion, primarily in power and energy, with Chinese contractors dominating these sectors. The Dhaka-Ashulia Elevated Expressway project exemplifies the broader trend of Chinese contractor dominance in Bangladesh’s infrastructure projects.


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