The immediate past four-party alliance government's favourite Orion Group's sister concern Accom Engineering Ltd was awarded the contract of the hotel's renovation work in October 2005 although the company should not have qualified for the job.

Since Obaidul Karim had gone into hiding in January to avoid arrest in connection with embezzlement of Tk 600 crore from Oriental Bank, the poorly progressing renovation work of the hotel came to a complete halt.

The job was awarded to Karim's company with a price tag of Tk 180 crore, inflating the real cost by at least Tk 100 crore due to Hawa Bhaban influence on the process, hotel sources said.

Although Accom Ltd was supposed to finish the job by January 2007, it has so far completed only 10 percent of the work which is also substandard, according to Hotels International Limited (HIL), the parent company of the hotel.

During a visit to the project site, The Daily Star found that no part of the renovation work has been completed yet.

But in the meantime Accom destroyed a good section of the hotel's structure which used to house some of the main amenity features including 100 rooms, the swimming pool, tennis club, kitchen, poolside restaurant, pool deck, and the health club.

As a result, revenue earnings of the state-owned hotel dropped to Tk 40 crore in 2006 from its earlier average annual income of Tk 75 crore. The hotel authorities predict that the earnings might come down to zero in 2007 as it seems uncertain whether the renovation work will be finished within the next two or three years.

The hotel is not only suffering from a very low revenue generation but also facing the lowest rate of occupancy in its history. The occupancy rate of the hotel came down to 30 percent from an average of 60 percent over the last one year due to the stalling renovation work, according to HIL statistics.

The hotel sources said a former state minister for civil aviation and tourism and some former lawmakers, who were close to Orion Group, facilitated the awarding of contract to Accom.

HIL sources alleged that the former state minister took Tk 5 crore as bribe from Orion Group and rewarded the company with the lucrative contract.

However, due to slow progress of the work, HIL already trimmed the project plan to reduce the hotel's losses bringing the cost down to Tk 148 crore including the cost of contingency items.

According to the contract signed between the parties, Accom was supposed to pay a penalty fee of Tk 24 crore to the hotel authorities for missing the deadline.

But dramatically, the hotel authorities in a board meeting in August 2006 waived the penalty and gave a four-month extension to Accom for finishing the job. Sources said an executive of HIL, who allegedly does his own business with Orion Group, exerted his influence in waiving the penalty for Accom.

Some HIL officials said at the current pace, the renovation work will not be completed in the next three years as most of the high officials of Accom and Orion Group went into hiding.

Due to the renovation project, some important amenity features of the hotel have remained unavailable to the clients for the last one year, causing drastic revenue shortfall for the hotel.

"Usually, Hotel Sonargaon contributes Tk 20 crore a year to the national exchequer. But due to the stalling renovation work it might incur a loss this year," said a high official of HIL.

Meanwhile, HIL is funding the project from its own coffer, putting itself in a financial uncertainty as it has already lost a large amount of money over the last 12 months.

"Generally we get money from the hotel. But for the time being unfortunately we are paying Pan Pacific, the management authority of the hotel," an HIL official said.

He said a total of 560 employees of the hotel are also experiencing reduced income since the hotel authorities have not been paying the customary 12.5 percent service charge to every employee of the hotel since Accom started the renovation on January 2006.

GRAFT IN TENDER
Investigating the over all project scenario, it was found that HIL awarded the contract to Orion Group bypassing some of the lowest bids.

Seventeen local, foreign, and multi-national joint venture companies showed their interest in participating in the tender but as the former state minister for tourism directly handled the bidding process, most of the bidders opted to drop out.

And most of the remaining bidders were disqualified by the tender committee one after another in the name of being technically unfit, although some of their bids were lower than Accom's.

Finally the hotel authorities selected two companies -- Acom Engineering Ltd and Orion Development Ltd -- for the final bidding, both of whom are concerns of Orion Group. The two companies submitted their proposals along with pay orders from a state owned bank bearing consecutive serial numbers.

A board member vetoed the questionable move in the meeting just to be sacked by the former state minister on a very short notice.

From the very beginning of the renovation work, irregularities and substandard work were detected by the hotel authorities.

HIL authorities sometimes expressed their dissatisfactions with the slow pace of the project. Such an expression of dissatisfaction sent a managing director (MD) of HIL to forced resignation. A four-party alliance lawmaker who was known as very close to Orion Group forced the erstwhile MD of HIL to resign on September 2006, before his contract deadline of May 2007.

ACCOM'S SUBSTANDARD WORK
HIL sources said Accom submitted a tender bid demanding very high price for every material needed for the job. But after getting the contract, the company did not maintain the agreed required standard of the project.

Sources said all imported materials were supposed to be examined by a consultant firm before use. But most of the time Accom flouted the rule and used the materials on its whim.

Citing an example, the sources said Accom used local Nasir brand glass in bathrooms instead of Japanese made glass required by the agreement.

In its project proposal Accom mentioned that it would import some materials for kitchens and some bathroom fittings from Japan and the US, but in the approved final project plan the specific condition was dropped, the sources said.

The management of Pan Pacific found many other irregularities in the project. The main plan of the project had to undergo changes many times due to Accom's lack of efficiency in such work, the sources added.

The substandard work of the company was also detected by Southeast Asia Technology Co Ltd (SEATEC), a consultant firm which supervised the renovation.

SEATEC in a letter on 21 January, 2007 said, "We believe the contractors' latest target date for completion of the work is not achievable at the current pace of work."

Sources said Interiors International Ind LLC of UAE is the lead partner of Accom, but no hotel official has ever seen any representative of the lead partner at the project site.

OTHER BIDDERS' VERSIONS
A failed bidder told The Daily Star requesting anonymity that some of the competitors' bids were lower than Accom's.

"But unfortunately, the tender committee disqualified us in the name of technical inadequacy," he said adding, "If you consider our portfolio and our experience in such work, the decision of the tender committee will seem questionable."

He also said the situation was such that all the competing companies had no other choice but to withdraw their bids.

When asked how much was his company's bid for the work, he said it was lower than Accom's. But he declined to give any more detail due to his concern for his own security considering the said state minister's much known habit of using muscle in settling disputes.

"When we found that a strong group with BNP affiliation was working behind the scene, we had to drop out from the bidding," said another bidder who also requested anonymity.

HIL'S VERSION
The image of Hotel Sonargaon is taking a beating due to the bungled renovation project, said a high official of HIL.

"It is happening only because of a state minister's corruption during his three and a half year tenure. He and his associates did everything according to their whims," the high official added.

He said the former state minister exercised dictatorial control over the affairs of the hotel beyond his jurisdiction.

He was a very powerful man and he imposed all his whims on the hotel authorities, just like he did in other sectors under his ministry, the official said.

He also said, "It is possible that a large amount of money was siphoned off from the project."

About tender irregularities, he said it might have happened. An inquiry committee had been formed by HIL to look into the allegations of irregularity which interestingly gave a seal of approval to the tender process, he added.

Hotel sources said some of the committee members were also involved in the irregularities and were very close to the former state minister.

Gholam Nabi, managing director of HIL said, "We will look into the allegations of irregularities against Accom Engineering Ltd."

He also admitted that the hotel is incurring a large amount of loss and said, "Business was very dull during the peek season between October and February."

About the dilly-dallying by Accom he said, "We sent a letter to the company asking it to address the issue."

PAN PACIFIC EMPLOYEES' VERSION
A total of 560 employees of Pan Pacific are being deprived of their 12.5 percent service charges for a year now due to the delay in renovation work.

But unfortunately no action has been taken so far to resolve the problem.

Talking to The Daily Star, the employees said they are victims of the greed of some already rich people.

"I feel ashamed when I see my foreign guests sunbathing on the roof of the hotel or in the passage outside," said an employee.

He said, "We had a large number of regular foreign guests. But when they found on our website that some common amenities of a five star hotel have been suspended for a year they felt discouraged to come to the hotel."

"We want a quick solution from the present government," he added.

ACCOM'S VERSION
Contacted by The Daily Star, Accom's Chief Project Coordinator M Sayedur Rahman refused to comment on the progress of the work and the bidding process.

He said he is new in the company and not aware of what went wrong with the project.

Another official, who works in the head office of Orion Group, told this correspondent that he is also new in the company and that there was no authorised person in the office to comment on the project.