RU evades tax, fees in land purchase

The Rajshahi University authorities have allegedly violated rules and resorted to corrupt practices to evade Tk 82.5 lakh in taxes and fees in a Tk 14 crore procurement of a land with a high-rise for the institution's guesthouse in Dhaka.

A committee headed by the pro-vice chancellor bought the land avoiding inviting fresh bids after canceling the tender twice before and showing a low price in the deed, according to documents and officials.

The committee, rather, negotiated with Khalid Mahmud, managing director of El Dorado Development Ltd, the highest bidder of the cancelled tender, for buying 3.5 Kathas of land with a seven-storey building in Hatirpool area in Dhaka city at Tk 13.25 crore.

A procurement expert said the authority violated the Public Procurement Rules of 2008 by avoiding the tender process.

“They have no authority to engage in negotiation with a bidder after cancelling his bid. They could have negotiated for asking him to participate in the next tender at the desired price,” he said, seeking anonymity.

After canceling the first tender, the authority invited bids for a second time on June 22. Out of two bidding developer companies, they selected the highest bidder, El Dorado Development Ltd, which offered Tk 13.65 crore. Other bidder, Metro Homes Ltd, offered Tk 11.95 crore.

However, the authority cancelled the bid of El Dorado after a legal adviser, Rafiqul Hasan, opined that the authority must buy the land showing the actual price.

As per the negotiation, the treasurer and the registrar hid the land's actual price and got it registered at Dhanmondi sub-registrar's office at Tk 3.5 crore on October 20.

Both parties declared in the deed that they did not devaluate the land price, but they signed an agreement on November 26, 2016, only 37 days after signing of the deed, stating the actual price of the land to be Tk 11 crore and that the remaining Tk 2.25 crore would be used to build a seven-storey building within February 28, 2017.

A government registrar said the university authorities hid the land's actual price for evading 11 percent of the land price in taxes and fees at the sub-registrar's office.

Buying the land at Tk 3.5 crore, they paid Tk 38.5 lakh in taxes and fees, but the amount would be Tk 1.21 crore, had they shown the land price at Tk 11 crore in the deed, he added.

However, Pro-VC Prof Chowdhury Sarwar Jahan said, “There might have been some procedural flaws, but ultimately we completed it (purchase) abiding the law taking approval from the finance committee and the syndicate.”

The syndicate approved the purchase agreement by describing to be on the "quick agenda", said Md Akhter Farooque, a syndicate member.

Prof Chowdhury, also president of the procurement committee, said they negotiated with an "honest intention" to save the university's money.

“Whose money are they saving and from who?” asked the procurement expert. He said the government gave the money to buy the land, and taxes would go to the state coffer.   

Vice Chancellor Prof Mizan Uddin claimed that they followed the rules for a "special procurement". He said the new building would save RU Tk 70,000 a month that the university was paying for renting a house in Dhaka.

“The university, since its inception 63 years ago, has bought a land for the first time and it will be used forever,” he said.

“It is a standard practice of the country that people buy lands at a price and get it registered at another price,” siad RU Treasurer Prof Sayen Uddin Ahmed.

An official of the university, however, said an institution could not handle public money the way the general people did.

The Daily Star contacted Khalid Mahmud but he hung up hearing the topic and saying he would call back later. He did not answer calls in the last three days.