The construction of the 12-storey NBL Twin Tower at Karwan Bazar has become uncertain at least for now as Bangladesh Bank would not approve it on apprehension of possible criticism.
The authorities concerned have already filled up the construction site with sand to avert possible disaster caused by the recent land subsidence there.
“The central bank would not approve the construction right now as it has already raised concerns,” said a senior executive of Bangladesh Bank.
The National Bank replied to the queries of Bangladesh Bank yesterday, though much later; it was supposed to send the reply before starting the construction work.
Bangladesh Bank on July 17 last year had asked the National Bank to comply with a couple of pre-conditions for getting the approval. But the bank had started construction without obtaining the central bank’s consent, consequently ending up with a setback.
A road near the construction site collapsed due to land subsidence, risking adjacent Sundarban Hotel that developed several cracks last Wednesday, forcing authorities to stop vehicular movements surrounding the site including the southern half of Panthapath.
The road opened yesterday morning – after three days – only before another subsidence occurred on the west side of the site around 8pm last night.
After the incident, the bank requested the central bank to withdraw the conditions of revising the building design with making new agreement with the construction company, and constructing the building in accordance with the prescribed rate of Public Works Department.
The project cost was estimated at around Tk200 crore.
The National Bank has already provided a little over Tk85 crore as advance against its tower, according to the published financial statement of 2014.
In its response to Bangladesh Bank, the bank also sought the central bank’s support to continue the construction of the NBL Twin Tower in accordance with the existing contract.
It explained that it is not possible for the bank to revise the contract with the construction firm because it would have to suffer huge financial losses as well as legal complications.
If the foreign construction company, Heerim Architects and Planners, take legal action against the bank, that would tarnish its image in the international market and the interest of the bank’s shareholders will be affected, said the bank.
Bangladesh Bank executives said the central bank would follow the circular that barred banks to have fixed assets above 30% of their paid-up capital in case of considering construction approval.
At present, National Bank has fixed assets valued above Tk281 crore or 18% of its paid-up capital. The percentage may cross 30% if the value of the new construction is calculated, said a senior executive of Bangladesh Bank.
In this situation, the construction activities of the bank may remain suspended for a temporary period, resulting in an increased construction cost that would hurt the shareholders’ interests, he said.
The bank had started the procedure for the building’s construction in 2012. At first, it sought Bangladesh Bank’s approval for constructing two separate 12-storey buildings – one for a five-star hotel and another for the bank’s head office.
Bangladesh Bank had rejected the proposal in the middle of last year, saying construction of a hotel building is not the job of a bank.
It allowed the bank to construct only the head office building subject to complying with a couple of pre-conditions.
But the bank started the construction designing one building with two towers.
