The Cabinet Committee on Economic Affairs has rejected a proposal of the Civil Aviation and Tourism Ministry to construct a tourism complex in Cox’s Bazar at its own initiative as it wants the project to be implemented under public-private partnership (PPP).
The ministry had moved to construct the tourism complex in Cox’s Bazar at its own initiative after having failed to implement the project under public-private partnership (PPP) even in five years.In a recent meeting, the Cabinet body turned down the ministry’s proposal and asked it to make further efforts to implement the project under the PPP model, official sources said.
The ministry repeatedly tried in the last five years to implement the project under the PPP but no company showed interest to tie up with it.
Finally, the ministry decided to execute the project at its own initiative under its annual development programme (ADP), said a source at the ministry.
But when the ministry placed its proposal before the Cabinet Committee on Economic Affairs on May 8 last to delist the project from the PPP list and give its approval to the latest proposal to implement it under the ADP, the committee outright rejected it.
Finance Minister AHM Mustafa Kamal, who presided over the meeting, expressed his resentment at the ministry officials, saying the public entities have no success in running any tourism project, said sources present at the meeting.
“So, the project must be implemented under the PPP model as per the previous decision even by softening the conditions of the contract,” the minister was quoted by the sources as saying at the meeting.He directed the officials to sit together with private investors and make a breakthrough in implanting the project under the PPP model, said a source.
Bangladesh Parjatan Corporation (BPC) had undertaken a project to turn Upol Motel Complex on 5.70 acres of land in Cox’s Bazar into an international hotel complex under the PPP model.
The ministry had placed the project titled ‘Establishment of International Standard Tourism Complex at existing Motel Upol Compound of BPC at Cox’s Bazar’ at a meeting of the Cabinet Committee on Economic Affairs on August 21 in 2014 whereby it received the go-ahead.
Following the approval, the Public Private Partnership Authority appointed Indian consultancy firm Feedback Infra Structure Advisory Services Pvt Ltd to conduct a feasibility study.
The Indian firm also prepared a contract document to award the project to a private partner under the PPP model.
Accordingly, the first bid was invited on February 22 in 2017 setting the upfront premium for the project at Tk 12 crore, and project development fee at Tk 5 crore and annual contract fee at Tk 2 crore with provision 5 percent increase per year.
The contract period of the project was set at 50 years. The last date of bid submission was May 1, 2017. But no bid was submitted except one although its date was deferred twice.
According to the sources, Orion Power Meghnaghat Limited was the lone bidder in the tender, but the bidder was not considered a qualified one by tender evaluation committee.
In such a situation, the PPP Authority advised the BPC to ease the conditions of the tender to make the project commercially viable and lucrative one for the private investors.
Complying with the advice, the sources said, the tender was invited for the second time on September 28, 2018 where the upfront premium was set at Tk 6 crore, project development fee at Tk 4 crore annual contract fee Tk 2 crore with 3 percent increase per year and tenure of contract at 25 years with provision of 15-year extension.
But on the last day of tender submission on November 11, 2018, it was seen that no bidder was interested to tie up with the project. Finally, the tender submission date was extended till December 11.
But no bidder submitted bids for the project this time, too.
The ministry finally decided to withdraw the Upol Motel project from the PPP list and implement it by its own only to be rejected by the cabinet committee.