CAAB faces Tk1,000cr-plus payout
Staff Reporter :
The Civil Aviation Authority of Bangladesh (CAAB) has been instructed to pay more than Tk1,000 crore to the Aviation Dhaka Consortium (ADC) following an unfavourable ruling in a long-running international dispute linked to the construction of the third terminal at Hazrat Shahjalal International Airport, officials said.
The decision was issued in Dhaka last week by a three-member international dispute board formed to adjudicate the financial disagreements between CAAB and the consortium, which have persisted for several years.
Officials familiar with the matter said the board reviewed claims and counterclaims from both sides before reaching its verdict.
A senior civil aviation official, speaking on condition of anonymity, said the disputed amount had remained unpaid due to audit objections.
“The dues accumulated over time, but payments were withheld following audit observations. CAAB now has 28 days to challenge the ruling.
If the objections cannot be resolved, the dispute may proceed to formal arbitration, where any award would be binding,” the official told the media.
Officials said the aviation ministry would be briefed on the ruling shortly, after which the government would decide its next steps.
ADC was formed to implement the third terminal project by Japan’s Mitsubishi Corporation and Fujita Corporation, together with South Korea’s Samsung C&T Corporation.
The dispute board itself comprised adjudicators from Malaysia, the United Kingdom and Germany.
In a letter dated 20 July, the ambassador of one of the consortium countries informed the aviation adviser that while the third terminal project stands as a landmark in Bangladesh’s infrastructure development, unresolved financial issues are now casting uncertainty over it.
The letter noted that Samsung C&T, a key ADC partner, has fulfilled its contractual obligations but has yet to receive a substantial portion of certified payments.
Despite global disruptions caused by the Covid-19 pandemic and the Russia–Ukraine war, the terminal project was completed on 2 January 2024.
However, according to the consortium, CAAB has not fully honoured its payment commitments under the contract.
The correspondence further pointed out that delays in appointing an operator for the new terminal have forced ADC to continue maintenance work without compensation, adding to operational costs and financial losses.
In a separate communication, another ambassador raised similar concerns, stating that although most construction work has been completed, CAAB has not formally taken over the facility. This, the letter said, has left the contractor bearing ongoing maintenance expenses.
Both communications warned that failure to resolve the issue swiftly could prompt the contractor to pursue legal remedies, potentially escalating the dispute to arbitration. Such a move, they cautioned, could damage Bangladesh’s international reputation and negatively affect future foreign investment inflows.
