Dhaka Elevated Expressway works halted for two weeks amid conflict between stakeholders

The Appellate Division has issued a two-week status quo order on the transfer of Italian-Thai Development Public Company Ltd's stake in the Dhaka Elevated Expressway to China's Sinohydro Corporation Limited.

As a result, the work of the Dhaka Elevated Expressway will be stopped for the time being, said lawyers.

The full appellate bench of eight judges headed by Chief Justice Obaidul Hasan passed the order today (16 May) after hearing an appeal of the Italian-Thai Development.      

The Dhaka Elevated Expressway is being built through a public-private partnership, with the main construction costs estimated at Tk8,940 crore. The investor company will cover 73% of the cost, while the Bangladesh government provides the remaining 27% as Viability Gap Funding.

The private partner, First Dhaka Elevated Expressway Company Limited, is primarily owned by the Italian-Thai Development with a 51% stake, while two Chinese construction companies, China State Construction Engineering Corporation Ltd and Sinohydro Corporation, collectively own the remaining 49%.

The project began in 2011, with the Italian-Thai Development as the contractor and investor.

Facing financial challenges, Italian-Thai secured an $861 million loan from the Exim Bank of China and the Industrial and Commercial Bank of China (ICBC) in 2019, leading to the sale of 49% of the expressway company's shares to the two Chinese companies.

However, loan disbursement was halted in January this year due to payment default by First Dhaka Elevated Expressway Company. To restart funding, Exim Bank and the ICBC directed the Italian-Thai Development to transfer most of its shares to China State Construction and Sinohydro.

Lawyers AM Amin Uddin, Sheikh Mohammad Morshed, Barrister Imtiaz Farooq, and Barrister Imtiaz Mainul represented Italian-Thai Development. Barrister Mohammad Mehedi Hasan Chowdhury and Barrister Mostafizur Rahman Khan represented the Chinese company.

The Appellate Division put a two-week stay on the High Court order that lifted the injunction on the transfer of Italian-Thai Development shares to China's Sinohydro, said Barrister Mohammad Mehedi Hasan.

The Appellate Division said it will decide after looking at the full judgment of the High Court.

Mehedi Hasan said Exim Bank has declined to provide any money for the construction of the elevated expressway until the shares are transferred. As a result, the construction work of the elevated expressway will be halted for the time being. 

On 12 May, the High Court removed the injunction on transferring Italian-Thai Development's shares to Sinohydro in the Dhaka Elevated Expressway.

Initially, the court had halted the share transfer process due to a case filed by Italian-Thai Development.

Mehedi Hasan said the court ordered resolving the debt-repayment dispute between the companies through arbitration in Singapore.

Subsequently, Italian-Thai Development appealed this decision in the Appellate Division.

The Dhaka Elevated Expressway spans 19.73 kilometres, extending to 46.73 kilometres with ramps. The initial segment, covering 11.5 kilometres from Airport to Farmgate, opened on 2 September last year. The down ramp, connecting to Karwan Bazar, was opened on 20 March this year.