Satellite tender 3: Family links raise further questions

The Bangladesh government has in the last few days launched the country's first satellite, named Bangabandhu-1. 

Back in May 2012, I wrote a series of three articles for the Bangladesh daily newspaper, The New Age about how the whole process started with serious irregularities in the tender process that resulted in a small US company receiving a $10 million consultancy contract when it did not meet the most basic tender requirements.  

Since the newspaper's website before 2016 is no longer online, I am publishing the articles again . Below is the third of the three reports, published on May 17, 2012. The links to the first two are here: US bid winner doesn't meet minimum tender requirements and BTRC manipulates space satellite tender to advantage small US Company

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Bangabandhu space satellite tender III 

Family links raise further questions about tender 

David Bergman

A key member of the small US company that won in contentious circumstances a $10 million consultancy contract to assist the government in the launch of the Bangladesh satellite Bangubandhu 1 is related through marriage to an Awami League minister. 

Shafiq A Chaudari, the vice-president of business development for Space Partnership International, the company that won the contract, is a brother-in-law of Farid Khan, the younger brother of Faruq Khan, the minister of civil aviation and tourism.

Farid Khan had an apparent interest in Space Partnership International winning the contract as he is the vice-chairman of Summit Communications, which was the main local partner of the US company in the tender application.

Summit Communications is part of the highly influential Summit Group which is run by Aziz Khan — the brother of both Farid and Farooq Khan — and which has won a significant number of major government tenders most notably in the power sector. Farid Khan is also a director of one of the group’s main companies, Summit Power Limited. 

In the past week, New Age has disclosed that Space Partnership International was given the $10 million contract even though it failed to meet the minimum tender requirements and received a significantly lower score in its technical evaluation compared with another company which was then unfairly disqualified.

Whilst there is no direct evidence that the family and business connections played a role in Space Partnership International winning the contract, in light of these previous disclosures the connections raise additional questions about the integrity of the tender process. 

Shafiq Chaudhuri, who is an experienced engineer in the satellite and telecommunications sector working in the United States for most of his career, told New Age that he started in his senior position at Space Partnership International in April 2011.

‘Space Partnership International approached me because in the request for proposals [from the Bangladesh Telecommunication Regulatory Commission] there had been a requirement that within the executive team of 10 consultants, there needed to be a Bangladeshi person with at least 15 years’ experience working in the field. I have 30 years’ experience,‘ he said.

‘The company knew of me from Washington. I am well known in the community for the work I do. And they said that there is an opportunity, would you be interested? I didn’t want to relocate myself [to Bangladesh] as I have a wife and kids. So we came to a deal that I will be on and off [in Bangladesh].’

Shafiq Chaudhuri confirmed that his sister-in-law was married to Farid Khan. 

When subsequently asked in an e-mail whether his family relations may have played any role in Space Partnership International receiving the contract, the US company’s vice-president said, ‘We are confident that the selection process was conducted properly and that we were selected because we were the most qualified.… We have nothing more to add.’

Farid Khan denied that his relationship with Shafiq Chaudhuri had any role in winning the contract stating in an e-mail sent from the United States that ‘given the limited nature of Summit’s role in the contract, it would make no sense for Summit to try to influence the outcome of the tender. It would be unnecessary risk well outside of the parameters of our standard business practices.’

He added that the company is ‘extremely sensitive about family relationships and always are conservative in all business dealings to protect the integrity of all involved.’

Farid also argued that as the inclusion of qualified Bangladeshis was encouraged in the tender documents, ‘it seems only natural that [Space Partnership International] would bring in Shafiq Chaudhuri, who has over 30 years of experience in satellite communications technology and they could not find better experienced Bangladeshi satellite engineer in the world.…’

The role that Summit Communications plays in the consultancy contract, however, remains unclear as statements made by Space Partnership International both in its bid documents to the Bangladesh Telecommunication Regulatory Commission as well as in an interview with New Age contradict with those made by Summit Communication.

In Space Partnership International’s April 2011 bid document sent to BTRC, Summit Communications is described as ‘a subsidiary of the Summit Group of companies, one of the leading industrial conglomerates of Bangladesh, [which] will provide logistics, procurement, engineering support and network implementation in Bangladesh.’

At a meeting with New Age in March 2012 after the company had won the contract, Space Partnership International’s managing director Bruce Kraselzky said that Summit Communications ‘has tremendous expertise in communications because of their experience on ground as a terrestrial operator. So for the feasibility study we will be looking to them for guidance to assess requirement, how do we make sure that we compliment rather than compete with existing terrestrial environment.’

However, Ariful Islam, the managing director of Summit Communications questioned this description of the company’s role in the consultancy contract. ‘We are just the local office. Space Partnership International is just using our address. We do not do any work for them,’ he said. 

‘I mean that in the satellite consultancy, Summit Communications plays no role except passing documents to the BTRC. We are just a liaison office. We have no expertise in satellite or related fields. Our real role is as a local office to take documents for the BTRC.’

Farid Khan also told New Age that Summit Communications was engaged by the US company ‘with the objective that once the satellite project is awarded, the SCL will consider providing its network services. Summit Communications Ltd and Summit Group have no connection with [Space Partnership International] other than our expression to provide future services of network.’

Iftekharuzzaman, the executive director of Transparency International, told New Age that allegations of any inappropriate influence should be subject to ‘independent investigation so that anyone found to be guilty of violating the rules by direct or indirect influence is brought to justice.’ 

He added, ‘Failure to ensure transparency and accountability in the bidding process will severely undermine Bangladesh’s standing as a destination of international business and investment. On the other hand, if the government does not take prompt action it will only create for itself an image of the protector of wrongdoings, and hence lose credibility.’