Dhaka, March 22 (bdnews24.com)— A parliamentary watchdog is reportedly backing a Singapore-based private company, IPCO, in a disputed land deal despite concerns raised by the relevant ministry that it could cost the government millions of dollars in damages.
The dispute goes all the way back to a 1999 deal involving 144 acres of land adjacent to the airport, which is now worth Tk 4,350 crore, according to the local land office.
The matter is now pending with the court and the government fears it might lose the legal battle if the standing committee on the civil aviation and tourism ministry does not amend the recommendations it made last year regarding the lucrative land deal despite two reminders by the ministry to do so.
The parliamentary committee is supporting the company's attempt to keep part of the prime land worth Tk 800 crore in exchange for dropping legal proceedings against the government.
The civil aviation ministry contends that the company has no right to any of the land since it broke its previous agreement, and the government now needs all the disputed land for expansion of the airport.
The ministry and the IPCO International Limited signed a contract to construct a hotel and golf course on the land in 1999 when the Awami League was in power.
The man who signed the contract on behalf of the government was the then minister Engineer Mosharraf Hossain. He is now the chair of the parliamentary committee, which is supporting the company's offer.
Under the 1999 deal, IPCO was required to complete construction of the hotel and golf course within one and a half years in time for the Non-Aligned Movement (NAM) summit that had been scheduled to be held in Dhaka in 2002.
Till today, however, there has been no construction and the land remains barren. Subsequent governments took no action to revoke the contract.
On its part, IPCO has claimed it was not responsible for violating the contract. "We're not at fault. The total fault goes to the government for not having approved the construction plans at the time," Abul Khair Litu, executive chairman of IPCO has previously told bdnews24.com.
However, when the Awami League returned to power in 2009, the civil aviation and tourism ministry decided to take up the issue afresh, realising that it needed the land for expansion of the airport.
Accordingly, the parliamentary standing committee looked into the issue and on April 12 2009, unanimously recommended that the ministry should scrap the deal with IPCO "immediately" and "realise compensation" from the company through the courts for breaching the agreement.
"We observed that IPCO completely failed to act in accordance with the agreement. We have asked the civil aviation authority to take legal action against the company", said committee chairman Engr Musharraf Hossain.
Later that month, as a direct result of this recommendation, the government announced that it was going to cancel the deal. In response, IPCO filed a petition against this decision, and in May the High Court ordered the government not to cancel the agreement until the court had ruled on the matter.
However, four months later, in a meeting on August 2 2009, the parliamentary standing committee reversed its former recommendations, telling the government that it should strike a fresh deal with the company allowing it to complete the project within a three-year period after the start of construction.
Moinuddin Khan Badal, a committee member, told bdnews24.com last August that IPCO had told the committee that it would drop the legal action if the government gave the company 25 of the disputed 144 acres of land. The 25 acres of land is currently worth about Tk 800 crore.
Badal denied that he was "negotiating for the company", saying that "the government cannot gain anything by going into legal action."
At the time, the committee denied that this was a reversal of its previous recommendations.
Ten days after the new recommendations, the ministry made its first plea to the committee. Civil aviation minister G M Quader wrote a letter stating that the implementation of this new recommendations would "cause significant harm to the state and the civil aviation authority.
"We've been waiting for the opinion of the law ministry on this issue. The matter is pending before the High Court for its disposal", he wrote.
Implementation of the committee's recommendations within the stipulated time-frame would be difficult and risky for the government, and may also weaken the government's legal position, he added.
Following the minister's letter, the committee met again on Aug 25 2009 to discuss the matter. It replied that "the ministry should not go for any legal measures at this moment."
Eight days later, ministry officials wrote back to the committee stating that this was not what was agreed at the meeting and asking for the words "should not go for any legal measures at this moment" to be deleted from proceedings of the Aug 25 meeting.
The committee has, however, not taken any action in response to any of the Ministry's letters – including at the last meeting on March 14 2010.
Eng Khondker Mosharraf Hossain on Mar 19 told bdnews24.com that his committee has "yet to amend the recommendations". He said that the only reason for the committee's second set of recommendations was "to avoid a long legal battle with IPCO." "We want the dispute should be settled as early as possible for ensuring development," he said.
