GK Builders’ unfinished projects see 10-15% cost hike

The cost of 17 projects which were under GK Builders climbs up by around Tk500 crore as the government is going to appoint new contractors to complete them.   

The projects were abandoned since the arrest of the firm owner SM Golam Kibria Shamim alias GK Shamim -- an expelled Jubo League leader -- in an anti-casino raid last year. The controversial businessman is behind bars now.

Nearly one year after, the government now moves for appointing new contractors for the unfinished projects, raising the deadline by two years.

Before appointment of new contractors, the Ministry of Housing and Public Works will pay the firm for the work it had completed.

A ministry official on condition of anonymity told The Business Standard that most of the project cost estimations were done according to the 2014 rate schedule when the construction materials were cheaper.        

"Project cost would go up as the re-tender for the unfinished work would follow the new 2018 rate schedule," added the official.   

The official cited example of a 500-bed hospital construction project in Dhaka's Sher-e-Bangla Nagar. GK Builders got the Tk420 crore project under which a 12-storey building will be constructed.        

The builders stopped construction soon after GK Shamim's arrest.

In the meantime, the re-tender for the unfinished project went up to Tk460 crore – which means the project cost climbed up by Tk40 crore, and the deadline by two years.       

The assessment team comprising a magistrate, public works ministry official and GK Builders representative estimated the value of completed work at Tk30 crore, and the government has already paid the firm.       

Meanwhile, the High Court upheld a government decision that cancelled an agreement with GK Builders for constructing a multi-storey building at Azimpur Government Colony in Dhaka.

This means GK Builders will no longer be able to work on the projects since the agreement cancellation followed due procedures.