Malaysian firm to be dropped from Jhilmil Residential Project
A Malaysian firm is set to lose the contract to construct 14,000 flats in the Jhilmil Residential Project in Keraniganj, near Dhaka, as the government moves to cancel the nine-year-old agreement over various irregularities, inconsistencies, and a lack of financial capacity.
A proposal to cancel the agreement will be placed at a meeting of the Cabinet Committee on Economic Affairs, to be held today, Tuesday with Finance Minister Amir Khasru Mahmud Chowdhury in the chair, according to a source at the Ministry of Housing and Public Works.
The Rajdhani Unnayan Kartripakkha (RAJUK) signed the agreement in 2017 during the tenure of the then Awami League government with the Malaysian company BNG Global Holdings and Consortium to implement the flat construction project under a Public-Private Partnership (PPP) arrangement.
According to the agreement, BNG Global was to construct 14,000 flats for middle-income people on 160 acres of land in the Jhilmil residential area.
A total of 85 buildings were planned—60 buildings of 20 storeys (including semi-basement) and 25 buildings of 25 storeys (including basement). In total, 13,720 flats were to be built in three categories: 9,120 flats of ‘A’ category with an area of 1,550 square feet; 2,576 flats of ‘B’ category with 1,750 square feet; and 2,024 flats of ‘C’ category with 2,400 square feet.
The project, located about two kilometres west of the China-Bangladesh Friendship Bridge over the Buriganga River, was estimated to cost Tk 99.79 billion. The entire investment was supposed to be made by BNG Global. However, the company has not invested a single penny, and no construction work has taken place over the past nine years either. As a result, the current government is moving to cancel the agreement.
Documents prepared for submission to the Cabinet Committee on Economic Affairs show that, under the agreement, a total of 12 conditions were to be fulfilled—four by RAJUK and eight by BNG Global. While RAJUK fulfilled three conditions, BNG Global did not fulfil any.
According to the rules, the conditions were to be met within 180 days of signing the PPP agreement. On 18 February 2024, BNG Global was asked through a letter to fulfil its conditions, but it failed to do so.
The documents also show that in October 2023, the Ministry of Housing and Public Works requested the Ministry of Foreign Affairs to verify the information provided by BNG Global.
The Ministry of Foreign Affairs instructed the Bangladesh High Commission in Malaysia to investigate the company. The evaluation report later stated that there were inconsistencies in the company’s financial and other information. According to the report, as of February 2023, the company’s net profit was only $696, indicating that it would not be appropriate for the firm to implement the Jhilmil Residential Park project.
Additionally, the Ministry of Foreign Affairs reported that the office of the project’s financing institution, Boulevard Capital Partner Limited, could not be found at the address it had provided.
At the same time, a report by an international credit rating agency found that Boulevard Capital is a single-owner entity with a paid-up capital of 10,000 Hong Kong dollars, equivalent to Tk 141,000 in Bangladeshi currency—insufficient to finance such a project.
Further document review reveals that a Chinese company, Jiang Construction Engineering Company Limited, filed a complaint against BNG Global at the Chief Metropolitan Magistrate’s Court in Dhaka. The complaint alleges that BNG Global Holdings Limited and SVC Jhilmil Residential Limited jointly raised $24 million in Bangladesh and misappropriated the funds through fraud. The allegation is currently under investigation by the Police Bureau of Investigation (PBI).
Considering these issues, both RAJUK and the Ministry of Housing and Public Works have recommended cancelling the agreement with BNG Global.