Nearly seven years ago, the ousted Awami League (AL) government launched an ambitious Tk 197 crore project to construct six 14-storey buildings in Chattogram city, aiming to provide affordable housing for 312 low-income families.
Initially praised by many, the project was also intended to offer the inhabitants additional facilities, including a three-storey departmental store, a two-storey health club and a four-storey mosque for the neighbourhoods.
However, the initiative—led by the Ministry of Housing and Public Works and implemented by the National Housing Authority (NHA)—has since become a glaring example of mismanagement and delays, with numerous regulatory violations emerging during its implementation.
Nearly seven years after the project’s launch and following two extensions to the deadline, its financial progress stands at only 18 per cent, while just 22 per cent of the construction has been physically completed.
While the authorities have attempted to terminate the contract due to sluggish progress, the sole contractor has filed a lawsuit against the former AL government, resulting in a complete halt to the construction.
Reasons behind the project
The former AL government recognised that constructing multi-storey buildings on limited land and allocating flats to potential beneficiaries would be an effective approach to addressing the housing needs of a growing population.
On January 30, 2018, the Ministry of Housing and Public Works approved the "Construction of Residential Flats for Limited Income Group of People at G Block, Halishahar Housing Estate, Chattogram (4th Phase) (Self-Financing)".
The primary objective was to improve the living standards of low- and middle-income groups by addressing housing shortages through the planned construction of residential flats and their subsequent allocation.
Initially, the project was approved with an estimated cost of Tk 182 crore (fully self-financed) and was to be implemented between October 2017 and June 2020. However, the cost was later increased by 7.90 per cent compared to the original development project proposal (DPP), prompting the preparation of the first revised development project proposal (RDPP), with an estimated cost of Tk 197.07 crore.
The revised project was approved on June 4, 2018, with the completion deadline remaining the same (October 2017 to June 2020). Although the budget was not increased further, the project’s timeline was extended in two phases—first by two years and six months, setting a new deadline of December 2022, and then by an additional three years, making the total implementation period from October 2017 to December 2025.
In total, the project’s completion date has been extended by five years and six months to date.
What went wrong?
The Implementation Monitoring and Evaluation Division (IMED) of the Ministry of Planning recently conducted an in-depth review of the project and published a report in June. The findings revealed that the project had been plagued by irregularities and arbitrary decision-making.
Upon reviewing the project's data, the IMED found that out of the total budget of Tk 197 crore, Tk 35.99 crore had been allocated by the RDPP, with almost the entire sum disbursed. The actual expenditure to date stands at Tk 35.71 crore. Despite nearly all allocated funds being spent, the overall progress of the project, in terms of financial allocation, was just 18.12 per cent as of April 2024.
For the fiscal year 2023-24, the revenue target for the project was set at a mere Tk 5 lakh.
Due to the unsatisfactory progress in construction, the project office issued a notice to the contractor, GKBPL-CHL (JV), for contract termination. In response, the contractor filed an arbitration case in court, leading to a complete halt in construction.
Building progress issues
Contractor GKBPL-CHL (JV), responsible for the six buildings, faced significant delays. In building no 7, work stopped after the first-floor shuttering, and in building no 8, only the retaining wall and column work were completed before halting. Work on building no 16 remained suspended. The ground floor roof casting was completed in building no 17, and in building no 18, the 8th-floor roof shuttering was left unfinished. In building no 19, work stopped after the 8th-floor roof casting.
Overall, progress on all the buildings had been slow. The authorities issued a notice with a 28-day deadline to terminate the contractor’s contract, prompting the contractor to file a lawsuit.
The court hearing, initially scheduled for March 16, 2024, was postponed due to unavoidable circumstances.
Procurement delays
The IMED found that none of the procurement activities for five product packages related to the project had been completed. The five packages include office furniture, computers, double cabin pickups, passenger and bed lifts (Germany), a 100 kVA generator and electrical pumps or motors. Given that the physical progress of the project stands at only 22 per cent, procuring these packages has not been possible.
Of the eleven civil works packages, a tender was issued and a contract signed for one, while no progress was made on the remaining ten. Land acquisition for the departmental store, health club and community mosque remains incomplete. Due to unfinished building construction, work on roads, RCC main and sub-drains, underground sewer and water lines, the 400 kVA substation, 10 kWp solar system, fire protection systems and installation of overhead lines, street and gate lights has yet to begin.
The procurement of two service packages—Service-1: architectural drawings, structural design, and consultancy fees, and Service-2: soil testing—has not been completed. Despite this, construction began without finalising these services.
According to the project office, architectural drawings and structural designs were provided by the Public Works Department. The office also confirmed that the National Housing Authority obtained the designs from the Public Works Department, resulting in no expenditure under the allocated funds for architectural drawings, structural design and consultancy fees.
Committee meetings, project oversight
According to regulations, a total of 52 meetings (26 each) of the Project Implementation Committee (PIC) and Project Steering Committee (PSC) were scheduled to be held over 79 months, up to April 2024. However, no PIC meetings have taken place and only two PSC meetings have been held.
The project is currently without a full-time project director, with the role being managed as an additional responsibility. This has resulted in shortcomings in oversight, poor time management and weaknesses in project management.
The IMED report revealed that only an economic feasibility study was conducted before the project’s launch, without evaluating environmental or societal impacts.
The large scale of the project, combined with the appointment of a single contractor without consideration of their capacity, has led to implementation difficulties. Legal complications with the contractor have caused a halt in project activities, IMED noted.
Additionally, the rising cost of construction materials, driven by global economic conditions, raises concerns about maintaining quality and completing the project on time. The extended timeline increases the risk of further price hikes for the flats, potential difficulties in securing beneficiaries in a competitive market and reduced structural integrity of partially completed buildings due to prolonged work stoppages, the report added.
Why the delay?
The IMED report reveals that land-related complications delayed the contractor's site handover, causing further setbacks. Additionally, in March 2020, the global Covid-19 pandemic led to government-imposed restrictions that forced the contractor to halt construction.
Post-pandemic, rising construction material prices prompted the contractor to stop work entirely. Weaknesses in project management and oversight by the project office further exacerbated delays.
The project director, serving in an additional capacity, contributed to deficiencies in oversight, with frequent leadership changes disrupting the project’s normal progress. Due to the contractor’s sluggish pace, the project office issued a notice to terminate the contract.
In response, the contractor filed an arbitration case, which is ongoing. As a result, all construction work has been halted. The hearing was scheduled for March 16, 2024, but no subsequent date has been set.
"Without resolving this case, moving forward with the project is impossible," the report noted.
When asked about the irregularity of PIC and PSC meetings, the project office cited the Covid-19 pandemic as the reason for the lack of regular meetings.
Furthermore, the report revealed that, before the project began, only an economic feasibility study was conducted, with no evaluation of environmental or social impacts and no related clearances were obtained.
No audit activities have taken place so far, the IMED report added.
