IDRA wants to move HQ to Agargaon despite cheaper Motijheel option

The Insurance Development and Regulatory Authority (IDRA) is seeking approval to relocate its headquarters to IDB Bhaban in Agargaon, Dhaka, despite an increase of nearly Tk 2 crore in annual office costs and the greater concentration of insurance companies around its current location in Motijheel.

In a letter to the secretary of the Financial Institutions Division (FID) on September 20, the insurance regulator cited inadequate natural light and ventilation, security constraints and an unsuitable working environment at its existing office in SBC Tower in Motijheel as reasons for the proposed relocation.

IDRA said it had operated from SBC Tower, at 37/A Dilkusha Commercial Area, since 2014, but necessary renovation work had yet to be completed.

The authority said its existing office space, working environment and future requirements, alongside its expanding responsibilities, had created a need for more suitable premises with adequate security, natural light and ventilation to ensure smooth and uninterrupted operations.

An IDRA official, speaking on condition of anonymity, said the regulator had inspected six buildings as part of its search for new headquarters.

Following the inspections, it shortlisted two buildings -- Sunmoon Star Tower in Motijheel’s Dilkusha area and IDB Bhaban in Agargaon.

However, IDRA has sought no-objection approval from the division only for renting space at IDB Bhaban, where the annual cost would be substantially higher than at either its current office or the alternative in Motijheel.

According to the proposal, IDRA currently spends Tk 5.95 crore a year on its office at SBC Tower, excluding value-added tax. The annual cost would fall to Tk 5.71 crore if it moved to Sunmoon Star Tower, while relocating to IDB Bhaban would raise it to Tk 7.76 crore.

The proposed move to Agargaon would therefore increase the regulator’s annual office costs by Tk 1.81 crore compared with its current expenditure and by Tk 2.05 crore compared with the Sunmoon Star Tower option.

WHY IDB

During its search for new premises, IDB Bhaban initially offered office space with associated facilities at Tk 151.25 per square foot a month, according to IDRA’s letter.

The regulator countered with an offer for around 31,989 square feet across the 11th, 15th, 16th and 17th floors, along with part of the ground floor, at Tk 118 per square foot a month. The proposed rate comprised Tk 75 in rent and Tk 43 in utility charges and service fees.

After negotiations, IDB Bhaban offered a final rate of Tk 130 per square foot a month, inclusive of all charges.

IDRA said it had assessed the rate based on the floor area, location, facilities and overall operating costs. The proposed rent covers security, parking, water and sewerage, central air conditioning, and generator operation and repairs, all of which are billed separately at its current office.

The authority said these inclusions, along with the building’s security arrangements and adequate natural light and ventilation, made the proposal worthy of consideration.

WHY NOT SUNMOON?

IDRA’s proposal highlighted the concentration of insurance companies around its existing location as a potential disadvantage of moving to Agargaon.

Of the country’s 81 insurance companies, 45 have their head offices in Motijheel, Paltan, Kakrail, the Daily Bangla intersection and nearby areas, according to the proposal.

No insurance company has its head office in Agargaon itself, although around six have head offices or offices in nearby areas.

The proposal also raised concerns about the impact of relocation on employees, noting that many had organised their housing, children’s schooling and other family and social arrangements around the authority’s current location.

A move to Agargaon could require employees to change their homes and their children’s schools and reorganise their family lives, it said.

Despite these considerations, IDRA did not seek no-objection approval for Sunmoon Star Tower, the less expensive option that would keep it closer to most insurance companies, an official familiar with the matter confirmed to The Daily Star. The official, however, was unable to explain the reasoning behind the choice.

The Daily Star contacted IDRA Chairman Mir Nadia Nivin by phone and text message to ask why the authority had sought approval for IDB Bhaban but not for Sunmoon Star Tower. She did not respond immediately.

Sadique Arman, public relations consultant at IDRA, said the primary objective of relocating the office was to provide a better working environment and more spacious, suitable facilities.

“We are optimistic that the improved working environment will enhance the efficiency, productivity and motivation of IDRA officials and employees,” he told The Daily Star.

He added that the authority had received no official update on its request for no-objection approval to relocate to Agargaon.

The Daily Star also tried to contact Nazma Mobarek, secretary of the Financial Institutions Division, but she did not respond immediately.