The Financial Express

RHD to settle claims through third party

Row with Japanese JV

Munima Sultana | Published: March 31, 2020 10:15:06 | Updated: April 01, 2020 10:39:29

RHD to settle claims through third party

The Roads and Highways Department (RHD) has started the process of settling the Tk 5.0-billion claims of Japanese contractors through a third-party opinion.

The builders worked on a big project to construct three major bridges and rehabilitate the existing ones on the Dhaka-Chattogram highway.

Last month, the Dispute Adjudication Board (DAB) sat with the RHD and the Japanese joint venture, and also collected relevant documents to work on the claims.

But the national road developer has been refusing to pay the amount as it is not mentioned in the contract.

"A third-party opinion is needed as the Japanese companies don't agree with the RHD's denial against claims," said project director Abu Saleh Md Nuruzzaman.

He said the DAB decision may go in favour of or against the government and both parties have scope to go to international court for review.

The RHD inked a Tk 59.66-billion deal with OSJI Joint-Venture Company (Obayashi Corporation, Shimizu Corporation, JFE Engineering Corporation and IHI Infrastructure Systems Company) on January 04, 2016.

As per the deal, the contractors were to build new Katchpur, Meghna and Gumti bridges along with rehabilitating existing bridges by January 03, 2020.

But they claimed around Tk 5 billion in the form of compensation and reward as it completed the Tk 84.86-billion project before schedule.

They overcame the challenges of a delay due to terror attacks on Japanese in Holey Artisan Bakery in June 2017.

The Japanese joint venture also saved Tk 15 billion from its contract price.

The new bridges were scheduled to be built by 2018 and the rehabilitation work by 2019.

Of the bridges, Second Kanchpur Bridge was opened to traffic on March 13, 2019, and two other bridges-Meghna and Meghna Gumti-next May.

Sources said the Artisan attack fully stopped the project for three months as Japanese engineers and consultants left Bangladesh until the government had provided foolproof security on the construction site.

The companies later brought modern machinery and managed to finish the undone work in time, they added.

Since the OSJI demanded Tk 5.21 billion, including Tk 2.0-billion time recovery cost, road transport and bridges ministry settled Tk 780 million against its first claim for Tk 1.42 billion.

The ministry, however, has been under pressure to settle the matter as multiple mega projects are now under construction with the financial support of Japanese government lending agency JICA.

Project office said disputes with contractors are usually settled in two ways-one through an amicable process and the other through dispute settlement board.

According to the rules of an international contract, any claim made by any party must be settled through international arbitration by forming a DAB if it cannot be resolved amicably.

But sources said the government as well as contractors are not bound to abide by the DAB's judgment.

In that case, the issue may linger if any of the parties go to international court, they added.


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