After sitting on the proposal for more than a year, the ministry sought the cabinet committee's approval again, but the committee sent it back to the ministry saying the proposal needed to be trimmed down.

The committee felt that the ministry was offering the contractor excess benefits. The 5km Jatrabari to Gulistan flyover project is being awarded to Belhasa-Acom JV, a Bangladesh-UAE-India joint venture.

It (cabinet body) instructed the ministry to revise the proposal in conformity with the newly approved Bangladesh Private Sector Infrastructure Guideline (BPSIG) within 15 days.

Belhasa-Acom JV has been enlisted in the private infrastructure projects. This is the first such enlistment since the BPSIG was approved a few months ago.

"The proposal did not reflect the (BPSIG) guideline. We have told them (the ministry officials) to trim the proposal as per the guideline," Finance Minister M Saifur Rahman told journalists after the cabinet committee meeting.

The proposal says the government will acquire land for the project and give it to Belhasa. And the government will pay demurrage to the private developer if the traffic flow over the flyover is less than 70 percent of the estimated flow.

The Belhasa consortium has also been offered exemption of tax, VAT and excise although a year ago the cabinet committee had clearly said that this was not acceptable.

"They suggested tax, VAT exemption. We said this is not possible. Our local investors are not given this opportunity-- why will we give it to the foreign companies? It is not possible to give such benefits by distorting the fiscal or monetary system," said Saifur.

The flyover toll rates proposed by the ministry range between Tk 5 and Tk 200. For a single trip on the flyover, a motorcyclist will have to pay Tk 5 each time, a CNG autorickshaw Tk 10, car Tk 35, minibus Tk 100 and trailer Tk 200.

The toll rates should be increased every three years on the basis of inflation rate, the ministry proposal suggests.

Following the cabinet committee's meeting, journalists told DCC Mayor Sadeque Hossain Khoka that there is hardly any instance where flyovers have tollbooth. Moreover, the toll collection process itself can create serious traffic jam.

"Many countries in the world has toll collection system for flyovers," Khoka defended the concept and claimed that it exists even in our neighbouring countries. "Otherwise how will they retrieve the sum spent?"

In reality, long stretches of flyovers in different Indian cities including Kolkata are part of the city's free regular infrastructure.

In January last year, the ministry tabled a similar proposal and the cabinet committee asked it to revise the proposal and said a decision will be taken by February 15, 2004. But the matter was not settled in the last one year.

The Belhasa consortium is one of the three companies that submitted proposals for the flyover project in a Dhaka City Corporation (DCC) bid floated in August 2003. Placed under the local government ministry, the DCC is the implementing authority.

The flyover will be constructed within 30 to 36 months on build, own, operate and transfer basis. The ING Bank of the Netherlands will lend $80 million and Commercial Bank of Dubai 75 million dirham. The developer will have to arrange the rest.