Bangladesh Economy thread

[leonblack08]

Leon, any private partner has yet been fixed ? will it be on B-O-T basis , or any partner country selected for this ? any news on that ?

Regards

UAE based company were interested in financing the projecthttp://www.newagebd.com/2008/oct/24/busi.html#4
As far as I know Indians are quite enthusiastic about this deep port,as they will be our largest customer.But not sure if they qualify for the bid.
Unconfirmed reports also say Chinese may be interested.

Chittagong port will pay 30% of the cost.

 

[leonblack08]

Deep sea-port to raise cargo handling ten times: shipping Minister​

July 15, 2009 · Leave a Comment

:: The Daily Independent Bangladesh :.. Internet Edition

Deep sea-port to raise cargo handling ten times: shipping Minister

BSS, DHAKA

Cargo handling in the country would increase to 325.26 million tonnes in 2055 from 33.77 million in 2010, rising by 10 times, with completion of the deep seaport at Sonadia Island at Cox’s Bazar.

The construction of the proposed deep seaport costing Taka 60,000 crore would start in 2010 and to be completed in three phases by 2055. The construction of the first phase with an involvement of Taka 13,000 crore will be completed by 2015 and it would start operation by 2016.

Shipping Minister Md Afsarul Ameen said this while briefing journalists after a meeting of nine-member inter-ministerial committee on deep seaport held at the conference room of the Shipping Ministry here yesterday.

The deep seaport, after completion of its first phase, would contribute a lot in the country’s economy as it would reduce transport charges for both import and export goods, save time for exportable, raise revenue of the government ten times and generate employment.

“Sonadia deep seaport would contribute to the growth of the national economy of Bangladesh, the Minister said adding the deep seaport would expand maritime international trade and would compliment existing ports with new capacity making them capable of accommodating larger vessels.

Sonadia site earlier was selected as the site of constructing the deep seaport as its geographical location offers real opportunities to play an important role in the regional trade and act as a gateway for the region to the rest of the world.
It is expected that the deep seaport would raise number of cargo handling every year to 74,146,000 tonnes in 2020 from 33,769,000 tonnes in 2010, which will rise further to 121,146,000 tonnes in 2030, 185,268,000 in 2040, 269,216,000 tonnes in 2050 and 325,258,000 tonnes in 2055.

A total of 36.01 million bulk cargoes, 28.93 million general cargoes, 8 million new users and 1.20 million transit cargoes would be handled annually at the deep seaport in 2020, while it would rise to 158.50 million for bulk cargo, 148.60 million general cargo, 8.80 million new users and 9.27 million transit cargo would be handled annually by 2055, he said.

In the first phase of the project (short term development), general cargo terminals, north breakwater, south breakwater and international container terminals would be constructed by 2015 costing Taka 13,000 crore.

In the second phase (medium term development), another general cargo terminal, IW terminals and harbor crafts berths, international container terminals and land spaces for non-cargo handling facilities would be constructed by 2035 with a cost of Taka 26,000 crore.

The long term development of the deep seaport (3rd phase) would be completed by 2055, involving Taka 21,000 crore, the Minister said.

The port would contain five international container berths, 4 international goods cargo berths, five IW container berths, two IW goods container berths, 1000 meters harbor crafts berth, 400 meters wide and 14 to 16 meter deep approach channel, 500 meter wide 14 to 16 meter wide turning basin, Dr Afsarul Ameen said.

The mother vessels would be able to anchor at the Sonadfia deep seaport carrying both import and export items in and from the country and at this time and cost on carrying those would be reduced, the Minister said adding at present, our export and import items are loaded and up loaded through feeder vessels at Singapore port.

“The costs of imported items would come down as the transport cost would reduce and at the same time, shipment of exportable items, especially readymade garments would be made timely,” he added.

The techno-economic feasibility study final report submitted to the committee was evaluated at the meeting today and it, along with technical evaluation committee report, would be sent to Cabinet Economic Committee for approval of detail design of the project.

Of the total cost of the project, the Chittagong Port Authority (CPA) would provide 30 per cent and the rest 70 per cent
would be funded through public-private partnership (PPP), he added.

Afsarul Ameen chaired the meeting. Cabinet Secretary M Abdul Aziz, Secretary of Prime Minister’s Office Md Abdul Karim, Finance Secretary Dr Mohammad Tareque, Shipping Secretary Md Masud Elahi, ERD Secretary M Mosharraf Hossain, Chairman of the CPA Comodore RU Ahmed, Chairman of Mongla Port Authority Comodore M Farooqu, Infrastructure Division Chief of Planning Commission Kamal Uddin Ahmed, Chairman of securities and exchange Commission (SEC) Md Ziaul Haque attended the meeting.

Deep sea-port to raise cargo handling ten times: shipping Minister Bangladesh Economic News

 

[Pintu]

UAE based company were interested in financing the project(http://www.newagebd.com/2008/oct/24/busi.html#4).As far as I know Indians are quite enthusiastic about this deep port,as they will be our largest customer.But not sure if they qualify for the bid.
Unconfirmed reports also say Chinese may be interested.

Chittagong port will pay 30% of the cost.

Thanks Leon, so , the rest 70 % will be financed by the Private foreign partner, well then I think it will be an Build-Operate-Transfer basis contract. May be European countries can also be strong contender.

Regards

 

[leonblack08]

I would like UAE or any Middle Eastern coutries to invest.Because,
1.That will be acceptable to all type of people in Bangladesh.

2.Involvement of India will create controversies,doubt,confusion and distrust.Causing unrest.Better India be left out of the financing part.They will be our largest customer,they are welcome.Strictly business.

 

[leonblack08]

Model of the Deep sea port

 

[Pintu]

I would like UAE or any Middle Eastern coutries to invest.Because,
1.That will be acceptable to all type of people in Bangladesh.

2.Involvement of India will create controversies,doubt,confusion and distrust.Causing unrest.Better India be left out of the financing part.They will be our largest customer,they are welcome.Strictly business.

What does it mean by Strictly Business part, if UAE or any Arab country do build the port are they doing that 'Out of ' "Strictly Business", or you believe India do 'out of business', while investing in Bangladesh ?

How can you be so sure that India will become your largest customer without investing in vital infrastructure projects like this one ? it is not necessarily granted that India vie for being Bangladesh's customer or be satisfied only in Customer role.




Regards

 

[Pintu]

The New Nation - Internet Edition

Bangladesh on right track despite slow progress: Muhith​

Staff Reporter



Finance Minister AMA Muhith yesterday identified three weaknesses in the economy including slow investment, high bank interest rates and narrow capital market, which are barring speedier growth.

"Otherwise, Bangladesh economy is advancing in the right dircetion maintaining its macroeconomic health," he told a seminar on `Exchange Rate Management under Floating Regime in Bangladesh' at Bangladesh Institute of Development Studies (BIDS).

Policy Resource Programme of BIDS in association with `Manusher Jonno' organized the seminar to review the country's foreign exchange policy in light of the floating exchange rate introduced in 2003.

Former Bangladesh Bank governor Dr Salehuddin Ahmed addressed the function as the special guest with BIDS Director General Dr Mostafa Kamal Mujeri in the chair.

BIDS researchers Monzur Hossain and Mansur Ahmed presented a joint keynote paper, while Professor MA Taslim, chief executive officer of Bangladesh Foreign Trade Institute, made a deliberation on the theme.

Special fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya spoke on the paper. Former commerce minister Amir Khosru Mahmud Chowdhury, among others, was present.

The Finance Minister emphasised the need for strengthening and widening the country's capital market to increase investment.

"The investment will remain slow unless we can deepen further the capital market while we will have to strengthen the money market," Muhith said, expressing his frustration over the declining public investment day by day.

"We're not being able to make progress in investment as such while the interest on bank loans in a way is far from the desired level," he said.

Muhith said it would not be easy to come out of these problems as the interest on bank deposits still remain at the same level of what it was at the time of more than 10 percent inflation. It has not been possible to expedite investment in the country due to the interest rate that has a close link with investment.

The Minister said the objective of the Bangladesh Bank intervention in the market has been successful as it reduced volatility.

He rejected the idea of adopting bilateral exchange rate as the major portion of the domestic transactions take place in dollar terms.

The keynote paper observed that the central bank intervened in the exchange market after introducing the floating exchange rate in 2003, particularly since March 2006, and found that the exchange rate has not been consistent with the real floating rate. The central bank pursued a "managed floating system."

The paper endorsed the rationale of the Bangladesh Bank intervention, but said that the rate has not been appropriate despite the intervention.

It said the Real Effective Exchange Rate (REER) of Taka has been overvalued due to stabilizing the exchange rate of Taka against the dollar, which contributed to slowing down the export growth.

Former Bangladesh Bank Governor Dr Salehuddin Ahmed, however, contradicted the idea of depreciating Taka against dollar which would have adverse impact on prices of import-based items and affect the real economy.

He said, "If we devalue the local currency to Tk 75 from Tk 68-69 it would not help improve the export competitiveness even by one percent."

"Rather it would raise the cost of doing business," Ahmed said and suggested measures for reducing cost of doing business instead of Taka devaluation.

"We don't do REER based exchange rate deliberately and it's rational to do so," he said, adding that the approach is to avert exchange market volatility that transmits and affects even the real sectors like agriculture, light engineering and SMEs.

On the cross-currency transaction with largest trading partners like China and India, he said, " Our cross-currency transaction is much less than that in dollar. It would be like stepping into a danger zone. We should avoid it as best as possible."

He recommended increasing foreign exchange reserve as much as possible to face any disaster.

Dr Debapriya Bhattacharya said in an import dependent country like Bangladesh, it is needed to increase domestic investment and it is not possible to boost its external trade only through depreciation of the local currency rather other macro-economic measures could be taken.

He emphasized the need for lowering bank interest rates to help promote export-led industries and other sectors to raise domestic investment by generating employment.

 

[leonblack08]

What does it mean by Strictly Business part, if UAE or any Arab country do build the port are they doing that 'Out of ' "Strictly Business", or you believe India do 'out of business', while investing in Bangladesh ?

How can you be so sure that India will become your largest customer without investing in vital infrastructure projects like this one ? it is not necessarily granted that India vie for being Bangladesh's customer or be satisfied only in Customer role.

Regards

You know India is not trusted by majority here.So there involvement will always be under scanner.But Middle Eastern countries will be acceptable to the masses,reason they being Muslim country,part of Ummah.

Well the main opposition and majority have got the feeling that India might try to interfere in our matters and our policies if given the chance of getting involved.Now India really does have that tendency just like any other big country.So it is better they remain our customer only.

Regarding India being our largest customer,Look at the Geographical location Brother.India has more benefits from it than China.

 

[leonblack08]

Here is why India will be our biggest customer.

Deep sea port in Bangladesh will help N-E​

Movement of transshipment cargo to North-eastern India could gain momentum, if the proposed deep sea port (DSP) comes up in Bangladesh. Highly-placed sources say that as Bangladesh is almost at the centre of South-East Asia, the DSP could act as a regional hub to transport goods to North-east India.

full report at:
Deep sea port in Bangladesh will help N-E - The Financial Express

 

[Pintu]

So it is better they remain our customer only.

Look at the Geographical location Brother.India has more benefits from it than China.

Thanks for your update leon, my point is that any bigger and diversified economy which deals with a much smaller economy does not satisfy only in customer role, yes it tends to be the customer but not only before having pie of the market of the economy it deals with.


And doing business does not clearly means 'Customer only' approach, no country in the earth will agree on that principle to do business with any other country, therefore I am simply not founding any logic in your point.

Regards

 

[Arjak]

Model of the Deep sea port

boy o boy,,.......surely looks like a kickass project
whoa!!!!!

 

[Pintu]

Model of the Deep sea port

Artistic model of the proposed deep sea port looks really beautiful.

Regards

 

[leonblack08]

Indian businessmen eye stronger trade relations​

The visiting Indian trade delegation has stressed strengthening trade relations between the two countries for economic development.

The trade delegation made the call at a seminar on "Bangladesh-India Economic Relations" at Hotel Sonargaon in Dhaka today.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Federation of Indian Chambers of Commerce and Industry (FICCI) jointly organised the seminar.

Commerce Minister Faruk Khan attended the inaugural session of the seminar as chief guest.

"We need to increase the connectivity. The connectivity between the governments, businesses and peoples of the two countries," said Dr Amit Mitra, secretary general of the FICCI.

A 50-member high-powered business delegation of India is visiting Bangladesh to explore bilateral business potentiality for the economic growth.

Harsh C Mariwala, vice president of the FICCI is leading the Indian business delegation, while Annisul Huq, FBCCI president, representing the Bangladesh side at the seminar.

Speaking at the seminar, Indian High Commissioner in Dhaka Pinak Ranjan Chakraborty said every year 25,000 Bangladeshi nationals enter India with visas, but they do not return home after expiry of the visas.

The Daily Star - Details News

 

[leonblack08]

Indo-Bangla connectivity in spotlight​

Commerce Minister Faruk Khan (3-R), Indian High Commissioner Pinak Ranjan Chakravarty (2-L), FBCCI President Annisul Huq (3-L) and leader of Indian delegation Harsh C Mariwala (2-R), among others, are seen at the inaugural session of a seminar on Bangladesh-India Economic Relations in Dhaka yesterday.Photo: STAR
Star Business Report
The visiting high-powered Indian business delegation yesterday urged the government to increase connectivity between the two countries to enhance bilateral and regional trade.

The members of the delegation said Bangladesh and India can boost both value and volume of trade through border trade, eco-tourism and aviation business.

"But, first of all we need people-to-people, business-to-business, cultural and road connectivity between the two countries to achieve the benefits," said Harsh C Mariwala, leader of the delegation, at a seminar at Pan Pacific Sonargaon hotel in Dhaka.

At the seminar on "Bangladesh-India Economic Relations", Mariwala, also vice president of the Federation of Indian Chambers of Commerce and Industry (FICCI), urged the political leaders of both the countries to remove barriers to cementing bilateral trade relationship.

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the FICCI jointly organised the seminar.

A 50-member business delegation of India is now visiting Bangladesh to explore bilateral business potential.

As the chief guest at the inaugural session, Commerce Minister Faruk Khan termed political barrier the main obstacle to developing bilateral trade between the two countries.

"We are trying to remove all misunderstandings between India and Bangladesh to boost trade in this region," Khan said.

He said trade was used as a political weapon in the past, not as a development tool. As a result, the trade between the two countries remained imbalanced, he added.

Khan asked the Indian side to remove some non-tariff barriers from the imports of Bangladeshi goods so the trade gap is narrowed to a balanced level.

Inviting the country's apex trade body, FBCCI, to work jointly with the FICCI for increasing business-to-business connectivity, Secretary General of the Indian chamber Dr Amit Mitra called for exploiting potential of border trade, eco-tourism and aviation business between the two countries.

"Although we have cultural connectivity, we are yet to do good business between us," Mitra said.

FBCCI President Annisul Huq urged all to establish rules of behaviour, well-defined products, markets and regulations that are established and enforced by the government for regional collaboration.

"We should not be busy so much with why Tata failed, or why Mittal could not take off, rather we now need to look at how we can work together and analyse any impediments that may slow the pace of trade and investment between the two countries," Huq said.

Underscoring the need for connectivity, Huq said: "The borders must become porous, visa issuance needs to be addressed quickly and media must be visible in both of the lands."

"If problems like Tipaimukh come up, we the businesspeople from both the sides, from around the region, should be united, vocal and stand by each other, protecting all our interests and each other's economy," he said.

Later, at the first working session of the seminar, the Indian businessmen showed interest to invest in leather, agro-processing, agro-product and readymade garment (RMG) sectors of Bangladesh.

In his keynote paper, Ahsan H Mansur, executive director of private think-tank Policy Research Institute, said Bangladesh's economy showed resilience despite global recession for its robust RMG exports and remittance inflow.

Inviting the Indian businessmen to invest in Bangladesh, Ifty Islam, managing partner of Asian Tiger Capital, Syed Nasim Manzur, managing director of Apex-Adelchi Footwear Limited, and Ahsan Khan Chowdhury, deputy managing director of Pran Group, presented keynote papers before the Indian delegation.

The Daily Star - Details News

 

[leonblack08]

PM for reducing trade imbalance with Pakistan​

UNB, Dhaka
Prime Minister Sheikh Hasina today stressed the urgency of removing Bangladesh’s widening trade imbalance with Pakistan as she said there is huge potential lying untapped for enhancing the bilateral trade.

She made the suggestion when Pakistan High Commissioner in Dhaka Alamgir Bashar Khan Babar paid a courtesy call on her at the Prime Minister’s Office this morning.

They also discussed various bilateral issues, including trade and investment and terrorism.

The premier stressed the need for joint efforts to root out terrorism to establish peace in the South Asian region.

“Terrorism and the terrorists have no boundary and religion,” she told the diplomat of Pakistan.

Hasina observed there is huge potential for enhancing bilateral trade between the two countries. “Due importance should be given to rectify the widening trade imbalance.”

The two-way trade in the recent years has been in the range of $300-$350 million, and Bangladesh’s exports have hovered around $70 million only.

The prime minister emphasized general understanding on granting zero-tariff access to each other under the Early Harvest Programme to reduce the expanding trade gap.

She also expressed the hope that Pakistani businessmen would take interest in investing in Bangladesh in the sectors of pharmaceuticals, textiles, information technology, telecommunications and agro-based industries.

Hasina recalled her recent meeting with Pakistani Prime Minister Yousuf Raza Gilani at Sharm el-Sheikh in the wings of the 15th Nam Summit and stated that they had fruitful discussions on how to work together to improve the quality of people’s life through eradicating poverty from the region.

Hasina said regional cooperation would have to be institutionalized and collective strength of the South Asian countries be harnessed to face the challenges in the region.

The Pakistani high commissioner expressed interest in bilateral exchange of information on different sectors.

The Daily Star - Details News

 

[NSG_Blackcats]

Oil firms win Bangladesh rights​

Bangladesh has granted Conoco Phillips of the US and Ireland's Tullow Oil three offshore exploration blocks in disputed waters in the Bay of Bengal. The firms have been given the right to explore for gas, despite ownership claims on some of the territory by neighbouring India and Burma. The oil firms will spend $160.5m (£98m) on exploring the area. The offshore bidding round was introduced last year by the then army-backed interim government.

"The government approved the leasing out of two deep-water offshore gas blocks to Conoco Phillips and one shallow water block to Tullow for oil and gas exploration in the untapped areas of the Bay of Bengal," said Mohammad Muqtadir Ali, of state-run Bangladesh Oil, Gas and Mineral Corporation. The results of the exploration by the two firms should come within five years. "The government is not in favour of awarding more than two blocks to a single company," Mr Ali added. The decision on awarding the gas blocks was made by the elected government, which came to power in a late-2008 election. Award of the gas exploration contracts has been made after it was estimated that the country's current gas reserves would run out by 2014-2015 at the present consumption rate.

Link

 

[Eagle_Flights]

Bangladesh Economy - News and Updates

GOVT SETS $17.6 billion EXPORT TARGET FOR 2009 - 2010
Monira Begum Munni

The government has set an ambitious $17.6 billion export target for the current fiscal year despite objection by a major export grouping and warnings by multilateral agencies that the shipment would be hit by global downturn.

The government's Export Promotion Bureau (EPB) has set the target, which sees a robust 13 per cent or more than two billion dollars increase in shipment from the exports of $15.56 billion in the 2008-9 fiscal year.

The target was fixed at a meeting of the EPB where knitwear and woven garments exporters, who account for some 80 per cent of the country's shipment, agreed to the government's upbeat projection, the Bureau said.

"Our garment exports have done well in the outgoing fiscal year due to a very competitive price. We think apparel exports would grow at about the same pace this fiscal," EPB vice-chairman Shahab Ullah said.

"For the current fiscal we set 13 per cent growth target banking on the continuous good performance by the ready-made garment sector. I don't think the global recession would have a major impact on apparel exports," he said.

Exports of garment items which include T-shirts, jeans pants, pullover, shirts and sweater grew more than 16 percent in the year concluded on June 30, 2009.

For the current fiscal year, all 21 major export products barring petroleum products have been projected to grow, including the top item knitwear at 13.50, woven garments 13 per cent, leather 30 per cent, medicines 15 per cent and agro-processed food a whopping 76.66 per cent.

Export of frozen food is expected to grow a modest three per cent due to a gloomy international outlook. Shrimp exports recorded the worst fall in a decade in the last fiscal year and the exporters have said they don't see any dramatic reversal of fortune.

In addition, a self-imposed ban on export of fresh water prawn till November due to the presence of harmful antibiotic and a massive destruction of thousands of farms during the Cyclone Aila have also hit production, Bangladesh Frozen Food Exporters Association said.

According to the EPB, export of footwear in the ongoing fiscal year would cross $200 million and bicycle $ 100 million for the first time in the country's history.

Outlook for traditional primary products such as jute, jute goods tobacco, tea and agricultural products, however, has been kept modest because of the falling demand in the international market.

The upbeat forecast has been made despite the country's largest export grouping has openly questioned the wisdom behind such a rosy projection.

Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) president Fazlul Hoque said the association has written a letter to the EPB, expressing disagreement to the projected export income.

"We don't think we'll achieve this target. The EPB has imposed it on the exporters. There is no rationale behind such an ambitious target," Hoque, whose grouping make up more than 50 per cent of the country's exports, told the FE.

The BKMEA president said exports of knitwear posted 17 per cent growth in the last fiscal year, due to a massive 50 per cent expansion in shipment in the first three months.

"The rest of the year our growth was less than seven per cent," he said.

"Global recession is not over yet. There has hardly been any increase in orders. So we don't think knitwear exporters would achieve 13.5 per cent growth that the EPB has projected," he said.

Multilateral agencies such as the World Bank and the Asian Development Bank have also made less-than-optimistic projection to the country's export growth, as they expect Bangladesh to be hit by the second round of the global recession.

The country's exports last year grew 10.31 per cent to a record $15.56 billion, with only five out of 21 major items registering positive growth.

The growth was more than 42 percent in the first quarter but it slowed down in the next eight months.

 

[Eagle_Flights]

CHINA OFFERS $1b FOR 5 PROJECTS
But favours hard loans; wants to pick bidders for their projects; unhappy with slow project implementation
Rejaul Karim Byron

China at a state-level meeting has primarily expressed its interest to finance five projects involving more than $1 billion as Bangladesh sought $5.14 billion assistance for 28 projects.

China also offers its assistance in a mix of buyer's credit and concessional loans, which have hard terms, against Bangladesh's request for soft loans.

Since 1975, China has given Bangladesh $1.5 billion finance, of which $978 million had been hard type loans.

The country also said in future Bangladesh should submit feasibility study reports to it for all its proposed projects, and then China would have its own feasibility study before deciding which schemes to finance.

China also expressed its unhappiness about Bangladesh's poor project implementation under Chinese fund.

The Chinese side also said the contractors for the projects to be assisted by China have to be selected from China which is an internationally accepted process.

China conveyed these suggestions earlier this month following a meeting of the Bangladesh-China Joint Economic Commission (JEC) held in Beijing on July 28.

Economic Relations Division (ERD) Secretary Mosharraf Hossain Bhuiyan headed a nine-member Bangladesh team at the meeting, while Vice-minister Chen Jian led a nine-member Chinese delegation. The last JEC meeting was held in Dhaka in May 2005.

Bangladesh team sources say China primarily expressed its interest in the projects of Seventh Bangladesh-China Friendship Bridge on the Arial Khan river in Kazirtek, Madaripur, Bangladesh-China Friendship Exhibition Centre, Shahjalal Fertiliser Factory, digital telecommunications networks at the metropolises and Pagla-Keraniganj Water Treatment Plant.

Mosharraf Hossain Bhuiyan told The Daily Star the JEC meeting has been successful, but its final success would depend on active implementation of the meeting decisions.

He said ERD in this regard has already started discussions with the ministries concerned.

Mosharraf added, "We requested the Chinese government to give soft loans instead of suppliers of buyers credit. If soft loan is available, approval and implementation of the project become easy. The approval process of suppliers or buyers credit is very complex."

The ERD secretary quoting the Chinese vice-minister said, "The Chinese government requested the Bangladesh side to prioritise the projects and inform them."

"However, the Chinese minister said the projects which were already being discussed may be considered on priority basis," he added.

The Chinese state bank the Export Import Bank of China last week also relayed the terms and conditions to Bangladesh.

Both sides signed an Agreed Minutes on Bangladesh's proposal on the projects and other issues.

Sources say the Chinese side agreed to conduct a feasibility study on the construction of Kazirtek Bridge which was confirmed by the signing of a Letter of Exchange on July 28.

The Chinese side would send an investigation team to Bangladesh for the project.

On the Bangladesh-China Friendship Exhibition Centre, the Bangladesh delegation accepted that due to the strict restriction on height, the net height for nearly 50 percent of the indoor space will be lower than 12 metres. The Chinese side also agreed to make a new design of the project.

The Import and Export Bank of China will send an expert team to re-evaluate Shahjalal Fertiliser Plant and report review conclusion to the Ministry of Commerce of China.

In September 2006 the Import and Export Bank of China and the Ministry of Finance of Bangladesh signed a general loan agreement on a preferential buyer's credit worth $211 million as part of preferential buyer's credit worth $400 million provided by the Chinese side and the agreement expired in August 2008.

The Bangladesh side proposed to provide the proposed loan to the "Introduction of 3G and Expansion of 2.5G Network" project instead of "Installation of Digital Telephone Exchanges in Metropolitan cities and Important District Headquarters and Upazila Growth Centres" and to provide soft loan for the project.

The Chinese side noticed the request of the Bangladesh side.

Sources say at the JEC meeting the Chinese side expressed dissatisfaction saying in the past changes have been made several times in selecting project and implementation in Bangladesh. Indonesia, on the other hand, started project implementation at the same time and completed implementation of all China-aided projects, but Bangladesh could make almost no progress.

The sources say at the meeting they also said Chinese grant would not meet Bangladesh's emergency needs. In this regard the Chinese government has its own limitations. In case of getting assistance of big amount Bangladesh would have to take loans from the Chinese banks.

They also told the meeting the feasibility study of the project for which Bangladesh sought assistance should first be done by Bangladesh. If the result of the study is positive then Chinese authorities may conduct their study.

They also said what kind of grant China would give to commercial projects depends mostly on the profitability of the projects.

The deficit against Bangladesh is the highest in China-Bangladesh trade. China has already given Bangladesh duty free market access for 84 commodities, but in reality there is no demand for these items in the Chinese market.

For this, at the JEC meeting Bangladesh sought duty free access for another 34 commodities in the Chinese market. China has not given any specific assurance in this regard but said it would consider the matter.

China has offered incentives like free booth to participating exhibitors from Bangladesh in the South Asian Countries Commodity Fair in Kunming by the end of this year.

The ERD high officials say they would write a fresh letter to the Chinese government requesting to inform how much assistance Chinese government is willing to give for the 28 projects and what are the terms and conditions.

After knowing how much assistance would be available the Bangladesh government would try to collect the gap in required fund from other sources.

Bangladesh was seeking Chinese assistance in introducing 3G telecom network and expansion of 2.5G network at an estimated cost of $211 million, construction of the second Padma bridge at an estimated cost of $579.21 million, Pagla/Keraniganj Water Treatment Plant at a cost of $267 million, North Dhaka (East) Sewerage Treatment Plant and associated sewerage system at a cost of $121 million and the second Meghna bridge on Dhaka-Chittagong Highway at an estimated cost of $125.36 million.

Dhaka will formally request Beijing to provide $1.4 billion to implement the Ganges Barrage Project and $88.12 million for restoration of the flow of the Buriganga river and for a project for prevention of river pollution, says the list of projects to be discussed at the talks.

Earlier, Bangladesh requested China to provide $560 million for implementing the North-West Fertiliser Company Limited project.

China however proposed a mixed credit scheme for the project, to which Bangladesh responded by urging China in June this year to provide the assistance for Shahjalal Fertiliser Company in Fenchuganj instead.

At the talks in Beijing, once again Bangladesh will request for a financial assistance of $600 million for the much-awaited Rooppur Nuclear Power Project. In February 2007, ERD sought the assistance from China, but a response is yet to come.

The national ICT infrastructure network for the Bangladesh government phase-2 at an estimated cost of $130 million, construction of a single line metre gauge railway track from Dohazari to Cox's Bazar through Ramu, and from Ramu to Gundum at an estimated cost of $210 million, a railway bridge with provision of dual gauge double track over the Jamuna river at an estimated cost of $172 million, Karnaphuli tunnel at an estimated cost of $289 million, and construction of Barapukuria 125 megawatt coal-fired thermal power station at a cost of 47.4 million are the other projects expected to be discussed.

 

[Eagle_Flights]

BD PLASTIC SECTOR EYES GLOBAL MARKET
Kazi Azizul Islam

The plastic sector, which is on the 12th position in the country's export earners' list with an annual earning of Tk 12 billion (1,200 crore) or about $173.9 million, is going to get a boost as two global superstores are eyeing Bangladesh market for importing plastic products.

Paris-based Carrefour, world's second largest supermarket chain after Wal-Mart, has started negotiations with one of Bangladesh's top plastic goods manufacturers to source plastic house wares.

This particular manufacturer, the licensee of the A&E, world's number one US brand for apparel hangers, also serves the local export-oriented garment manufacturers.

Stockholm-based IKEA, the global home furnishing leader, has, meanwhile, showed its intention to source house wares of easily shipable plastic goods from a number of Bangladeshi manufacturers.

After developing their base, some Bangladeshi companies have started manufacturing plastic furniture and plastic accessories for domestic market. Some consignments of such products have already been exported.

Eyeing the growing local market, some domestic plastic goods manufacturers have also recently started production of house wares including baskets, buckets and treys.

"Export of plastic goods, worth several billion dollars, is possible if the government supports the industry," said Bangladesh Plastic Goods Manufacturers and Exporters Association (BPGMEA) president, Jashim Uddin.

China's earning from the export of plastics goods, including toys and house wares, is not much less than her export earnings from textiles or garments sectors, he noted while pointing out that the Chinese manufacturers have lost their competitive edge in many ways in recent times, creating a large scope for Bangladesh to grab a significant share in global plastic goods market.

Many global superstore chains, including Wal-Mart and TESCO, import apparels from Bangladesh and they may also be interested in importing plastic goods from the country if dependable capacity on sourcing is developed here, say business sources.

The BPGMEA submitted earlier a detailed proposal to the commerce ministry to take some policy measures for promoting exports of products of their members on a sustained basis. The suggestions include allowing duty-free import of raw materials for plastic industry, establishing plastic testing laboratory, accelerating the implementation of proposed plastic industry estate and easing duty draw back procedures for small exporters. These merit priority attention of the authorities concerned.

Plastic sector eyes global market

 

[Eagle_Flights]

TWO FOREIGN FIRMS TO EXPLORE GAS IN THREE OFFSHORE BLOCKS
M Azizur Rahman

The government Monday approved 'conditionally' the awarding of three offshore blocks to two foreign companies -- US ConocoPhillips and Irish Tullow - for oil and gas exploration in the untapped areas of the Bay of Bengal.

The cabinet committee on economic affairs stamped its seal of approval to lease out two deep-water offshore gas blocks - DS-08-10 and DS-08-11 to ConocoPhillips and one shallow water block SS-08-05 to Tullow.

Both the companies have pledged to invest a total of US$160.50 million in their bids for hydrocarbon explorations in the three approved offshore blocks.

"We have approved three bids of the foreign companies and asked the energy ministry to hold discussion with the companies relating to signing of the production sharing contracts (PSCs)," the chief of the cabinet committee Finance Minister AMA Muhith told newsmen after the meeting.

But both the companies must avoid exploring the sea areas that became disputed due to overlapping with blocks of the neighbouring countries, he said pointing to the condition imposed by the cabinet committee.

"We are, however, hopeful of settling the dispute over maritime boundary delimitation with neighbouring India and Myanmar through negotiations," said Foreign Minister Dr Dipu Moni.

The results of the exploration by the foreign companies might come within four years for the shallow water block and five years for the deep-water blocks, said energy secretary Mohammad Mohsin.

Responding to a question the energy secretary said the government was not in favour of awarding more than two blocks to a single company.

The state-run energy company Petrobangla had primarily selected the US oil company ConocoPhillips and Irish firm Tullow for a total of nine offshore blocks under the country's latest offshore bidding launched in February 2008.

The ConocoPhillips was selected by Petrobangla for DS-08-10; DS-08-11; DS-08-12; DS-08-15; DS-08-16; DS-08-17; DS-08-20 and DS-08-21 blocks.

Tullow Bangladesh was selected for SS-08-05.

The Petrobangla made the selections after evaluating offers from companies including China's CNOOC, Australia's Santos and the Korean National Oil Corporation.

ConocoPhillips was selected for eight blocks and Tullow for one.

The energy ministry recently recommended leasing out only three offshore blocks in total and sent its proposal to the cabinet committee on economic affairs for approval.

The offshore bidding round was launched by the army-backed caretaker government in the wake of the country's depleting gas reserves.

But the decision on awarding the gas blocks was left to the elected government.

While inviting bids by the previous caretaker government in February 2008 it had pledged to sign the contracts by October 2008.

In its bids the ConocoPhillips pledged to invest $110.66 million and offered a bank guarantee of the same amount for the two approved blocks, while Tullow committed to invest $49.85 million and offered a bank guarantee of $33.9 million.

As of now, Cairn Energy-operated Sangu gas field is the country's lone operational offshore gas field.

International oil companies have been awarded only 12 hydrocarbon blocks -- both onshore and offshore -- since gas exploration began in the country in late 1960s.

But they now hold only six blocks having given up the rest.

The leasing of the Bangladesh's onshore hydrocarbon blocks to international oil companies is now halted following a court order.

But the country urgently needs new energy sources, and unless new gas fields are discovered, the supply of gas will start diminishing from 2011.

The government forecast that the country's current gas reserves will run out by 2014-2015 at the present consumption rate.

At present, proven gas reserves are 7.3 Tcf, while the probable reserves are 5.5 Tcf.

The country's economy has been growing at an average of 6 per cent since 2003-2004, the highest rate of growth since independence in 1971.

Expanded industrial activities have raised the demand for energy and there is now a daily shortage of 250 million cubic feet per day (mmcfd).

This has forced Petrobangla to suspend gas supplies to new industries.

The government has suspended new gas connections to bulk consumers and decided to continue it until the overall gas out put reached 22,00 mmcfd.

Operation of three state-owned gas-guzzling fertiliser factories are now suspended to divert gas to other industries and power plants.

Separately, a number of power plants with a total generation capacity of around 600 megawatts (mw) are currently not operating due to gas crisis.

Currently the country produces around 1950 mmcfd of gas against the demand for over 2200 mmcfd.

TWO FOREIGN FIRMS TO EXPLORE GAS IN THREE OFFSHORE BLOCKS
M Azizur Rahman

The government Monday approved 'conditionally' the awarding of three offshore blocks to two foreign companies -- US ConocoPhillips and Irish Tullow - for oil and gas exploration in the untapped areas of the Bay of Bengal.

The cabinet committee on economic affairs stamped its seal of approval to lease out two deep-water offshore gas blocks - DS-08-10 and DS-08-11 to ConocoPhillips and one shallow water block SS-08-05 to Tullow.

Both the companies have pledged to invest a total of US$160.50 million in their bids for hydrocarbon explorations in the three approved offshore blocks.

"We have approved three bids of the foreign companies and asked the energy ministry to hold discussion with the companies relating to signing of the production sharing contracts (PSCs)," the chief of the cabinet committee Finance Minister AMA Muhith told newsmen after the meeting.

But both the companies must avoid exploring the sea areas that became disputed due to overlapping with blocks of the neighbouring countries, he said pointing to the condition imposed by the cabinet committee.

"We are, however, hopeful of settling the dispute over maritime boundary delimitation with neighbouring India and Myanmar through negotiations," said Foreign Minister Dr Dipu Moni.

The results of the exploration by the foreign companies might come within four years for the shallow water block and five years for the deep-water blocks, said energy secretary Mohammad Mohsin.

Responding to a question the energy secretary said the government was not in favour of awarding more than two blocks to a single company.

The state-run energy company Petrobangla had primarily selected the US oil company ConocoPhillips and Irish firm Tullow for a total of nine offshore blocks under the country's latest offshore bidding launched in February 2008.

The ConocoPhillips was selected by Petrobangla for DS-08-10; DS-08-11; DS-08-12; DS-08-15; DS-08-16; DS-08-17; DS-08-20 and DS-08-21 blocks.

Tullow Bangladesh was selected for SS-08-05.

The Petrobangla made the selections after evaluating offers from companies including China's CNOOC, Australia's Santos and the Korean National Oil Corporation.

ConocoPhillips was selected for eight blocks and Tullow for one.

The energy ministry recently recommended leasing out only three offshore blocks in total and sent its proposal to the cabinet committee on economic affairs for approval.

The offshore bidding round was launched by the army-backed caretaker government in the wake of the country's depleting gas reserves.

But the decision on awarding the gas blocks was left to the elected government.

While inviting bids by the previous caretaker government in February 2008 it had pledged to sign the contracts by October 2008.

In its bids the ConocoPhillips pledged to invest $110.66 million and offered a bank guarantee of the same amount for the two approved blocks, while Tullow committed to invest $49.85 million and offered a bank guarantee of $33.9 million.

As of now, Cairn Energy-operated Sangu gas field is the country's lone operational offshore gas field.

International oil companies have been awarded only 12 hydrocarbon blocks -- both onshore and offshore -- since gas exploration began in the country in late 1960s.

But they now hold only six blocks having given up the rest.

The leasing of the Bangladesh's onshore hydrocarbon blocks to international oil companies is now halted following a court order.

But the country urgently needs new energy sources, and unless new gas fields are discovered, the supply of gas will start diminishing from 2011.

The government forecast that the country's current gas reserves will run out by 2014-2015 at the present consumption rate.

At present, proven gas reserves are 7.3 Tcf, while the probable reserves are 5.5 Tcf.

The country's economy has been growing at an average of 6 per cent since 2003-2004, the highest rate of growth since independence in 1971.

Expanded industrial activities have raised the demand for energy and there is now a daily shortage of 250 million cubic feet per day (mmcfd).

This has forced Petrobangla to suspend gas supplies to new industries.

The government has suspended new gas connections to bulk consumers and decided to continue it until the overall gas out put reached 22,00 mmcfd.

Operation of three state-owned gas-guzzling fertiliser factories are now suspended to divert gas to other industries and power plants.

Separately, a number of power plants with a total generation capacity of around 600 megawatts (mw) are currently not operating due to gas crisis.

Currently the country produces around 1950 mmcfd of gas against the demand for over 2200 mmcfd.