Besides, BON Consortium is unlikely to be able to arrange bank loans to finance this project, as Karim is wanted by the police in connection with different graft and criminal cases filed against him for swindling Tk 594 crore from Oriental Bank. Charges against him were based on a central bank investigation done at the fag end of the alliance government rule, making the case rock solid.

Karim has disappeared since last week. His disappearance is most likely to affect other projects and businesses awarded to him including the Gulistan-Jatrabari flyover and the operation of Bangladesh-China Friendship Conference Centre.

A Dhaka City Corporation (DCC) source said that work related to the eight-kilometre-long Gulistan-Jatrabari flyover project has slowed down significantly, even though it has not stopped. He said two Chinese contractors, on behalf of BON Consortium, were present at the site but their works were lagging far behind the schedule. This project demands a cost of over Tk 500 crore.

"We have a foreign consultant and a Bangladesh University of Engineering and Technology (BUET) team overseeing the implementation. We are expecting the monthly report from the consultant by February 7 and then we would be able to understand how uncertain this flyover project has become," he added.

The BON Consortium, which bagged the power deal as a political favour by the previous alliance government, on January 21 gave PDB a Tk 6.22 crore cheque as land rent and initial development payment. But the cheque bounced.

As per the Land Lease Agreement (LLA) of Meghnaghat-2, the PDB can cancel the contract for such a fault. But the PDB gave BON Consortium three weeks' time that expires on February 22 and served it with a notice of "Project Company Event of Default" as per the LLA. The BON Consortium must "cure" its action, or the contract will be cancelled.

"With great concern it is informed that the power company has failed to make payment of rent and Initial Development Payment within due date and constitutes a "Project Company Event of Default" under Land Lease Agreement, which if not cured within 22nd February, 2007 shall give rise to the right on the part of Bangladesh PDB to initiate action pursuant to Land Lease Agreement," said the PDB letter.

The PDB gave BON Consortium 20 acres of land.

Meanwhile Karim has gone into hiding. Various sources claim that Karim has fled to Malaysia with his family using fake names and addresses. The Daily Star tried to contact him over telephone several times yesterday but failed to reach him.

In addition to failing to pay PDB the initial development payment, Karim is unlikely to be able to arrange finances for Meghnaghat-2 within April, and meet the contractual deadline.

The power project needs at least US $250 million for engineering and procurement of the plant and its installation.

"Because of the cases and corruption charges against him, no bank is going to put their neck in this project," quipped an official.

"This project is dead. The country has paid the price of unfair tendering process for this project," he added.

The BON Consortium is supposed to be led with German power company Steag with only 20 percent stake (officially unannounced), Obaidul Karim claimed to The Daily Star early January. Orion has only 16 percent share and Belhasa holds the remaining shares.

However, though holding a small share, the BON Consortium is headed by Karim himself and he has been tapping various banks to arrange the project finance. Karim had also held an international tender to procure power plant equipment last year and received three bids from NSRD, a Chinese company, Korean Hyundai and another unqualified Chinese company. Karim told The Daily Star that he might opt for Hyundai plant and finalise the tender in February.

But the cases against him have thrown him off the driving seat of this project as well as other projects.

While these cases were being set to be filed against Karim, the BON Consortium gave the PDB a cheque of Tk 6.22 crore. But the bank returned the cheque to the PDB along with a note saying, "May be presented again, 7 days required."

The PDB reviewed the situation in the light of the LLA and deducted the event of default. The PDB can cancel the contract if the contractor fails to take a remedial action. The LLA did not spell out any cure period for this kind of fault. So, the PDB resorted to another part of the contract dealing with material breach, which gives a 30-day period.

Early January, Obaidul Karim met The Daily Star correspondent to brief on the progresses on this project. The Daily Star ran a number of stories on this project, highlighting how Karim has been unduly favoured at the bid selection process and later during the contract formulation process.

Karim claimed that he had finalised 80 to 85 percent of the project finance. Upon awarding the engineering and procurement contract in February, he would be able to close the finances in March. He also claimed that world leading financiers were ready to fund the project.

Industry insiders said that Karim was earlier turned down by several top financiers like Asian Development Bank (ADB) and the World Bank--who's small involvement gives other financiers confidence to pump in major parts of required fund.

Orion never actually gave the bid that was selected for this power project and it actually submitted its name as one of the two partners of a Japanese bidder Nisso Eiwi, which has the experience to qualify for building such a power plant. However, Nisso disappeared from the scene in 2004 and Orion brought in another German company Steag showing it as the lead bidder. The government initially rejected such a gross anomaly, but then with pressure from the Hawa Bhaban the government accepted and approved the bid by August 2005. Orion signed a series of contracts with the PDB and other authorities for the power project and signed the LLA, the final deal, on October 11 last year.