ADB doubles commitment for next three years

/0 Comments/in /by

ADB doubles commitment for next three years

 

The Asian Development Bank is ready to lend $8.01 billion to Bangladesh over the next three years, almost the double the amount it had committed in the previous three years.

Between 2015 and 2017, the Manila-based multilateral lender committed $4.08 billion.

The ADB has already sent an indicative plan to the government about its intent to bankroll various mega projects with the view to reducing high transport and logistics costs and improving access to domestic, regional and international markets.

It will focus on the development of transport corridors integrating roads, railways and ports in order to ease congestion, improve climate resilience, continue institutional reforms and facilitate trade.

The ADB will continue to support the development of the Dhaka-Chittagong-Cox’s Bazar Railway corridor, add the Dhaka-Southwest road corridor to the pipeline and support investments in the Chittagong Port.

The lender will also support the improvement of public transport in the capital through the Dhaka Metro Rail project and work towards developing high-speed rail corridors, logistics and inland waterways.

In April, an ADB mission visited Bangladesh and held talks with concerned officials, said an official of the Economic Relations Division.

Of the $8.01 billion, $4.33 billion is available for commitment right away. Of the sum, $1.45 billion will be given in 2019, $1.42 billion in 2020 and $1.47 billion in 2021.

Some 31 projects are ready for implementation under this, according to the ERD official.

The remaining $3.68 billion are on standby: $1.18 billion can be used in 2019, $1.23 billion in 2020 and $1.27 billion in 2021.

If projects are ready to roll, funds will be given from the standby allocation, according to the ERD official. The development lender does not approve a project before it is ready.

The ADB’s new lending will be in energy, transport, education, water and urban services, agriculture and rural development.

The bank will provide about $140 million for the Bangladesh-India grid interconnection project, $35 million in technical assistance loan for the Dhaka Metro line-5 (South) and $250 million in investment for the first phase of the same project.

Some $100 million will go towards LNG imports, $200 million for LNG transmission pipeline, $200 million for Dhaka-Chittagong high-speed rail, and $200 million for Dhaka-Chittagong Expressway project.

In 2018, the resource available is $1.64 billion, and ad of July the ADB board has approved $1.19 billion.

Apparel to gain from Sino-US trade row

/0 Comments/in /by

Apparel to gain from Sino-US trade row

Bangladesh will be a China-alternative for US brands: survey

Star Business Report

 

The ongoing trade war between the US and China will be beneficial for Bangladesh’s garment sector as the American brands will place more work orders here to branch out their sourcing, according to a new survey.

Respondents in the ‘2018 Fashion Industry Benchmark Study’ expressed more interest in expanding sourcing from Bangladesh in the next two years as they actively seek China alternatives.

Some 75 percent of the respondents said they will source from Bangladesh. It was 61 percent in 2017.

Nearly half of respondents expect to somewhat increase sourcing from Bangladesh through 2020, up from 32 percent in 2017. Another 7 percent expect to strongly increase sourcing there, a record high since 2015.

“The “Made in Bangladesh” label enjoys a prominent price advantage over many other Asian suppliers,” said the study conducted by Sheng Lu, associate professor of the department of fashion and apparel studies of the University of Delware, in collaboration with the United States Fashion Industries Association (USFIA).

Like last year, respondents said Bangladesh offers the most competitive price, followed by Vietnam. Bangladesh was the fifth most preferred sourcing destination among American retailers due to price advantage, up from its previous position of seventh.

However, respondents still regard “risk of compliance” as a notable weakness.

The high level of media and public attention to the social responsibility problems remaining in the Bangladeshi garment industry, such as factory safety and treatment of workers, further adds to the complexity and sensitivity of the issue.

Since compliance is so important to American fashion companies, concerns about the compliance risks involved in sourcing from Bangladesh could hold companies back from giving more orders to the country, the study found.

The survey was conducted in the April-May period, when talks of a trade war by the Trump Administration were high.

For the second year in a row, respondents say the protectionist trade policy agenda in the US is their number one concern — up from a ranking for number 8 and 11 between 2014 and 2016.

China remains the top supplier for most US fashion companies. However, China now accounts for only 11-30 percent of companies’ total sourcing value or volume, compared with 30-50 percent in the past, according to the study.

Consistent with the official US trade statistics, China (100 percent of the respondents) and Vietnam (96 percent) continue to be the two most utilised sourcing destinations, followed by Indonesia (79 percent), India (75 percent), Bangladesh (75 percent) and Cambodia (61 percent).

Tk 1 lakh for each project

/0 Comments/in /by

Tk 1 lakh for each project

Jagaran Chakma

 

Some 64 projects, many of which are important infrastructure ones, got just Tk 1 lakh each this fiscal year in a bizarre move by the government that has presented its most expansive development budget yet of Tk 1.80 lakh crore.

People do not benefit from these token allocations as it will further delay the implementation of the projects, said Ahsan H Mansur, executive director of the Policy Research Institute.

“This is misallocation of resources as well as waste of public money,” he added.

Of the 64 projects, 57 are five to eight years old and they were scheduled for completion this June, four are ongoing and the remaining three did not even start work, according to data from the planning ministry.

But the government has indiscriminately allocated Tk 1 lakh to each of these projects without considering their deadline or their importance.

Take the case of the Tk 2,008 crore Shikalbaha 225 megawatt (MW) dual fuel combined cycle power plant, which as of February this year has spent Tk 1,282 crore or 64 percent of its allocation.

But the government has given just Tk 1 lakh to it this fiscal year.

Similarly, the construction of the Bangladesh Railway’s new line for Ishwardi-Pabna-Dhalar Char has got a mere Tk 1 lakh despite the completion of 91 percent of the work as of February.

Another striking case was the construction of the Muradpur-2 Gate and GEC Junction Flyover in Chittagong, a Tk 970 crore project.

As of February, the project is 63 percent through and yet the government gave it only Tk 1 lakh this year.

There are at least six projects on the list with over 90 percent of the works done, with one even 99 percent through.

Another nine projects have finished at least 80 percent of their works.

“This token allocation will keep the projects alive and we will revise those in future,” MA Mannan, state minister for finance and planning, told The Daily Star yesterday.

He, however, acknowledged that in some cases the cost of the projects increased due to delays in implementation.

Mansur said the planning ministry should stop the projects or allocate the necessary funds.

Often, the politicians just want to show that they are working on a big number of projects, so the projects are kept alive by allocating token funds, said AB Mirza Azizul Islam, former adviser to the caretaker government.

“It’s eyewash,” he added.

Towfiqul Islam Khan, research fellow at the Centre for Policy Dialogue, said they have also found some projects that have finished but still got allocations and so did some others that are yet to take off.

Abdus Salam, chairman of the Chittagong Development Authority, suggested Khan might be right.

The Muradpur-2 Gate and GEC Junction Flyover project has already been completed, he said.

“I was surprised to see that the government has allocated Tk 1 lakh for the project in the current fiscal year.”

Be proud of your garment sector

/0 Comments/in /by

Be proud of your garment sector

Says outgoing Dutch ambassador

Star Business Report

Bangladesh should be proud that the country has some of the world’s best garment factories, said the outgoing Dutch ambassador in Bangladesh Leoni Cuelenaere yesterday.

Currently, the country has 73 green factories certified by the US Green Building Council and 320 are waiting to be certified by the American organisation. Of the top 10 green factories, seven are in Bangladesh.

“Some of the world’s best factories are located in Bangladesh. Be proud of yourself,” said Cuelenaere at a farewell ceremony accorded to her by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) at its office in Dhaka.

After the Rana Plaza building collapse the global focus was on Bangladesh. The global focus is also on Bangladesh now but it is for a positive reason, she said.

Bangladesh supplies 20 percent of the total requirement of garment items to the EU in a year, according to Cuelenaere.

She advised the country to maintain a warm relationship with the EU so that it can continue to enjoy the zero-duty benefit under the GSP plus upon graduation from the least developed country (LDC) bracket in 2027.

Once Bangladesh becomes a developing country, the EU will levy a 12.5 percent duty on export.

However, there is a possibility of continuation of the same duty-free benefit to the EU even after the graduation provided certain conditions are met.

The GSP scheme is awarded to a country which is very much compliant in business, production and in supply chain of the exportable goods.

Bangladesh will have to ratify 27, including four core, conventions of the UN to be eligible for the continued GSP plus benefit to the EU.

BGMEA has accorded the farewell to Cuelenaere recognising her extraordinary advocacy in favour of locally made garment items during the turbulent times for the sector.

After each of the incident, the garment sector faced an image crisis, but the ambassadors of different countries, including the Netherlands, launched massive campaigns in favour of Bangladesh.

The campaign by the envoys helped in brightening the image of the country. Before her departure, the ambassador, who completed her three-year tenure in Dhaka, also said Bangladesh’s garment sector is now safe.

In his recognition speech, Siddiqur Rahman, BGMEA president, highlighted the Dutch ambassador’s contribution in the meetings of three secretaries and five diplomats committee formed to strengthen the safety in the country’s garment sector.

NBR thwarts solar energy march

/0 Comments/in /by

NBR thwarts solar energy march

Sohel Parvez

New and ongoing green energy initiatives are set to face spiralling costs in the wake of the shock imposition of value-added tax on the import of solar panels from this fiscal year.

The National Board of Revenue has slapped a 5 percent advance income tax (AIT), 5 percent advance trade VAT and 15 percent VAT on the import of the module. In other words, there would be about 27 percent levy.

The measure by the revenue authority took the industry stakeholders, particularly the solar panel importers and solar system integrators, by surprise as they have been demanding zero duty import benefit to facilitate fast expansion of the green energy.

“Solar home systems will become unaffordable for many because of the latest NBR measure,” said Dipal Barua, president of the Bangladesh Solar and Renewable Energy Association (BSREA), a body for solar panel importers, integrators and producers.

The tax administrator slapped the advance trade VAT and VAT at a time when the government aims to generate 2,000MW of electricity, or 10 percent of total production, through renewable energy by 2020.

A number of solar-based initiatives such as solar irrigation, mini-grids, rooftop-based solar home system and solar power plants are being established in various parts of the country.

Already, 999 solar irrigation schemes, 15 mini-grid and 25MW solar rooftops have been established, according to Sustainable and Renewable Energy Development Authority (SREDA). The SREDA, in a letter to higher ups, said the solar home systems have the most potential for renewable energy generation.

About 52 lakh solar home systems have already been installed, benefitting 12 percent of the total population in off-grid areas.

The agency urged the NBR to waive all sorts of VAT and tax on solar panels and cells.

“The expansion of renewable energy will be seriously affected unless the tax and VAT are withdrawn,” said Infrastructure Development Company Ltd (Idcol), a major financier for renewable energy, in a letter to NBR higher up at the end of last month.

The cost of every solar based project will go up substantially, as a result of which it will be tough to make the schemes financially viable, even after paying financial grant.

As a result it will be difficult to attain the government’s renewable energy target. Besides, large panels are used to generate power through solar energy-based mini-grid, irrigation pump and rooftop systems.

But these plants do not have the capacity to make such type of panels or do not have proper certification, Idcol said.

Better quality solar panels could be imported at prices lower than those of locally assembled panels if import duty and taxes are exempted, it added.

Contacted, Idcol Executive Director and CEO Mahmood Malik said the rise in import cost for the imposition of advance trade VAT and VAT will be beneficial for local assemblers. “But overall, the impact will be negative.”

Idcol is promoting the expansion of solar rooftop systems to generate more energy.

“Solar rooftops will not become attractive. But, there will be huge impact in the long-term if we can generate 400-500MW of electricity from solar rooftops,” he added.

BSREA Treasurer Md Ataur Rahman Sarker said mis-declaration in imports will increase because of the VAT.

Bangladesh requires 50MW equivalent solar panels annually and most of the demand is met through imports because of insufficient domestic production, he said.

NBR Chairman Md Mosharraf Hossain could not be reached for comments despite repeated attempts.

Access to electricity rises to 90pc: BPDB

/0 Comments/in /by

Access to electricity rises to 90pc: BPDB

Star Business Report

Some 90 percent people in Bangladesh have come under the electricity network, way higher than 47 percent nine years ago, said Bangladesh Power Development Board (BPDB) yesterday.

In a statement, the state-run agency said the number of power plants went up to 121 now from 27 in 2009.

The highest amount of power generated in 2009 was 3,268 megawatt whereas it rose to a record high of 11,059MW recently.

The number of consumers went up by more than two times to 2.99 crore.

“Overall, 90 percent of the population has access to electricity now,” said BPDB.

The agency said the government has given utmost importance to the power sector.

System loss went down to 12.2 percent now from 16.9 percent in 2009.

“The budget implementation capacity of the power sector has increased significantly in the last nine years,” said BPDB.

The sector has been able to implement the full revised ADP before the fiscal year came to an end in June, according to the statement.

In fact, the power division was one of the top achievers that managed to expend higher than the average amount of allocation in the just concluded fiscal year.

The allocation for the sector from the annual development programme rose from Tk 2,677 crore in 2009 to Tk 26,292 crore in the current fiscal year.

The government plans to generate 24,000MW of electricity by 2021.

Govt to renovate 550 food silos

/0 Comments/in /by

Govt to renovate 550 food silos

Star Business Report

The Executive Committee of the National Economic Council (Ecnec) yesterday approved six projects of Tk 2,920 crore, including one to renovate 550 food silos.

Under another project, a new design would be used for a planned permanent exhibition centre in Purbachal to hold the annual Dhaka International Trade Fair.

Prime Minister Sheikh Hasina was in the chair when an Ecnec meeting approved the projects.

State Minister for Finance and Planning MA Mannan briefed journalists about the projects after the meeting.

A Tk 317 crore project has been undertaken to renovate the food silos and raise their storage capacity by 30 lakh tonnes in total within 2021, in a bid to increase food security.

According to a planning ministry proposal, there are 2,722 food silos of different sizes in the country with a storage capacity of 21 lakh tonnes.

Under the project, 725 CCTV cameras and 725 solar panels and instant power supply (IPS) systems will be installed at the silos.

In the revised China-Bangladesh exhibition centre project in Purbachal, cost was raised from Tk 796 crore to Tk 1,303 crore, of which Tk 626 crore was being provided by the Chinese government as a grant. The size of its venue would be doubled.

Scheduled to have been completed last month, the project is now stipulated to be over in December 2020.

Mannan quoted officials as saying at the meeting that the project may be completed next year ahead of schedule and the trade fair could be held there from then.

Another Tk 217 crore project will enable land acquisition and other works under public-private partnership for Khan Jahan Ali airport at Bagerhat in Khulna.

A Tk 170 crore project will see to the vertical expansion of circuit houses in 37 districts.

Singapore keen to invest in financial sector

/0 Comments/in /by

Singapore keen to invest in financial sector

Star Business Report

A high-powered business delegation from Singapore yesterday showed keen interest to invest in the banking and financial sector as it offers immense growth potential.

“There is business potential for foreign banks in Bangladesh and a few international banks already operate here,” said Teo Siong Seng, chairman of the Singapore Business Federation and the head of the delegation.

“We are aware of the country’s economic growth. The country has been maintaining 6 percent to 7 percent GDP growth over the last few years.”

Seng spoke at the Bangladesh-Singapore Business Forum at the Pan Pacific Sonargaon Hotel in Dhaka.

He said Singaporean businessmen are also interested to invest in pharmaceuticals, shipping, engineering, construction, hospitality, power and infrastructure.

Other preferred areas for investors included ICT, professional services and credit rating services, he said.

Seng said Singapore has been able to become a business hub thanks to ease of doing business.

Jointly organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and the Bangladesh Business Chamber of Singapore, the forum was moderated by Sheikh Fazle Fahim, senior vice-president of the FBCCI.

Over the past decade, the Bangladesh economy has been one of the top performers in Asia, said Enamul Huque, head of global banking of Standard Chartered Bangladesh.

He said inflation has been moderate and public debt levels low by world standards.

“With a median age of 26.7, Bangladesh’s young and growing working-age population will endow the country with the benefits of demographic dividend today and build a strong base for domestic consumption in the coming decades.”

“This means that Bangladesh will continue to see large investments from the world’s supply chains – originally in the RMG sector, but now across industries,” he said.

Huque said with an inherently low cost-base, skilled labour force, developing infrastructure and export incentives, Bangladesh can also prove itself to be a strategic base for sunset industries from more advanced Asean markets that are looking to relocate, and the industries that find themselves in crosshairs of protectionist trade policies.

Nasrul Hamid, state minister for power, energy and mineral resources, urged Singaporeans to invest in energy and power as Bangladesh needs $40 billion in investment in the sector in the next five to six years.

Hamid said the government is going to sign an agreement with American multinational conglomerate GE in Dhaka today to produce 3,600 megawatt of power.

FBCCI President Shafiul Islam Mohiuddin said because of Bangladesh’s geographical location, many countries are showing interest to invest in the country.

For instance, a Thai minister has recently instructed the businessmen of his country to invest in Bangladesh, he said.

Kazi M Aminul Islam, executive chairman of Bangladesh Investment Development Authority, said Bangladesh has the demographic dividend as the majority of the population is young.

“Foreign investors can take advantage of it.”

The Bangladesh Business Chamber of Singapore was set up in 2010 to facilitate bilateral trade between the two countries.

Nearly 300 Bangladeshi businessmen are doing business in Singapore, said Mohd Shahiduzzaman, president of the chamber.

The balance of two-way trade is heavily tilted towards Singapore.

In 2016-17, Bangladesh imported goods worth $2.44 billion and exported goods worth $335.12 million, according to the FBCCI.

Bicycle-rental startup JoBike plans big

/0 Comments/in /by

Bicycle-rental startup JoBike plans big

Muhammad Zahidul Islam

Bicycle-rental service JoBike, which would allow riders to rent a bike from one’s smartphone, is set to roll out operations within the next three months at public universities with a view to providing economical and environment-friendly mode of transport for students.

Initially, the startup plans to run its service at Dhaka University, Rajshahi University, Chittagong University, Bangladesh Agricultural University in Mymensingh and Islamic University, Bangladesh, in Kushtia, said Mehdi Reza, founder and president of JoBike.

JoBike will start its pilot run at Jahangirnagar University next week, after fine-tuning its operations in Cox’s Bazar in the past three weeks.

Some 30 bicycles will be available along seven points, also called docks, of the Jahangirnagar University campus. The points will be close to the halls of residence and academic buildings.

To rent a bicycle from JoBike, one has to download the mobile application and open an account. The app would show the nearby docks with available bikes. After entering payment information a QR code will be provided, which needs to be scanned to unlock the bikes from the dock.

Users will be charged Tk 3 for every five minutes, and the bicycles must be returned to the point where they were taken from.

Based on user feedback the fare will be reviewed as well as other related issues before full-fledged operation is launched in August with 200 bicycles at Jahangirnagar University. “Youths will be our main users,” said Reza, a former product operations manager at Alibaba Group, the largest online trading company of the world.

Since it is an environment-friendly mode of transport, bicycle-rental service is very popular in large cities like London, New York, Melbourne, Paris, Madrid, Copenhagen and Singapore and so on. “The same thing will happen in Bangladesh.” Asked if the company is concerned about the bicycles’ security, JoBike officials replied in the negative.

The company is using the Internet of Things (IoT) in their specially-designed bikes, so those can easily be located using the technology.

The company had planned to launch the service at Jahangirnagar University six months back but because of regulatory issues it was pushed back. Reza, who started JoBike with his two Alibaba colleagues, though is optimistic about the service’s success.

“We are getting huge response from Cox’s Bazar even though we launched on a very limited scale there,” he said, adding that the company will expand its fleet size from 20 to 170 in the tourist town within the next one month.

Shameem Ahsan, an investor in the startup and a former president of the Bangladesh Association of Software and Information Services (BASIS), is an early believer in the venture’s potential.

“I hope this venture will become a billion dollar company,” Ahsan, also the chairman of e-Generation Group, said, while declining to share the amount he invested in the company.

11 listed firms remain traceless

/0 Comments/in /by

11 listed firms remain traceless

Ahsan Habib

Eleven companies listed on the Dhaka Stock Exchange have made off with at least Tk 42.19 crore of investors’ money, in what can be described as a stunning instance of swindling.

Neither the capital market regulator nor the DSE has taken any step to trace the companies and retrieve the money.

The companies are Amam Sea Food, Bangladesh Electricity Meter (BEMCO), Chic Tex, German Bangla J V Food, M Hossain Garments, Metalex Corporation, Pharmaco International, Rangamati Food Products, Raspit Data Management, Raspit Inc Bd and Saleh Carpet.

Listed on the over-the-counter market of the DSE for years, the companies are now untraceable.

The OTC market is a separate trading floor for the companies that are delisted from the main board or do not meet the eligibility for listing on the main board.

As per the face value of the stocks gathered from the DSE, general investors lost Tk 42.19 crore. But DSE documents indicate none purchased the shares at face value: all paid at least five times more, so the total losses would be about Tk 200 crore.

The Daily Star went to the addresses of six of the 11 companies — Raspit Data Management, Raspit Inc Bd, Saleh Carpet, Chic Tex, Pharmaco International and M Hossain Garments — and did not find their existence at all.

“Many investors come here looking for this company, but they have left many years ago,” said Fakhrul Islam, the watchman of the property listed as the official address of Raspit Data Management and Raspit Inc Bd.

The two companies had sold off their all assets before vacating the premise, he said. The owner of the building that housed Saleh Carpet’s office said the company had departed in 2008 without clearing the rent.

And the company sold off its 13 acres of land in Chittagong’s Bhatiary on August 28, 2008 to East West Container Terminal. “Why is the regulator yet to take any steps against the companies?” said Mostaque Ahmed Sadeque, president of the DSE Brokers’ Association.

The sponsors of the companies are running other businesses, so it is easy to trace them, he added. But the stock market regulator, the Bangladesh Securities and Exchange Commission, washed its hands of the issue.

“This is not our responsibility,” said Saifur Rahman, spokesperson of the BSEC, adding that the commission does not have the manpower to investigate an issue of this stature.

It is the responsibility of stock exchanges, he said.

Asked if the issue managers, the ones responsible for bringing the companies to the stock market, can be held responsible for the brazen act of fraudulence, Rahman replied in the negative.

“The issue managers have responsibility on some issues and for a certain period of time. We cannot ask them after such a long time,” he added.

KAM Majedur Rahman, managing director of the DSE, said the stock exchange will take initiative to trace the companies.

The companies can be delisted from the OTC board but it is not the solution, as investors will not get their money back, he added.

Jakir Hossain, an investor of M Hossain Garments, said he looked for the company’s factory but failed.

Now, he has given up hopes of retrieving his money.

Amam Sea Food was listed in 1966 as a food and allied company. The company’s total number of shares stands at 100,800 and the face value of each share is Tk 100.

General investors, who held 34.7 percent shares of the company, lost Tk 34.97 lakh as per the face value of the shares.

BEMCO was listed on the DSE as an engineering company in 1995. Its total shares are 364,000, each carrying a face value of Tk 100.

General investors, who held 74.73 percent stakes of the company, lost Tk 2.72 crore.

German Bangla J V Food was listed in 2001 as a food and allied company. Its total stock was 50 lakh and general investors, who had 50 percent stakes, lost Tk 2.50 crore.

M Hossain Garments was listed in 1995 as a textile company. General investors lost Tk 4 crore, as they held 66.67 percent of the 6 lakh shares with face value of Tk 100.

Listed in 1988, Metalex Corporation, an engineering company, had 50,000 shares of Tk 100 face value. Investors held 47.11 percent of the shares and lost at least Tk 23.55 lakh.

Pharmaco International was listed in 1987. The total number of shares is 2 lakh, each with a face value of Tk 100. General investors lost Tk 1.48 crore as their shareholding was 74.44 percent.

Rangamati Food was listed in 2001 as a food and allied company. Its total share was 30 lakh. General investors lost Tk 2 crore as their shareholding was 66.67 percent.

Raspit Data Management, an IT firm, was listed in 2001. Its total shares are 50 lakh. General investors lost Tk 2.50 crore as their shareholding is 50 percent.

Raspit Inc was listed on the DSE in 1995 as a food and allied company. General investors, who held 50 percent of the 1.57 crore shares of the company, lost Tk 7.88 crore.

Saleh Carpet was listed in 1995. Investors lost Tk 3.97 crore as they held 65 percent of the company’s total shares of 61.10 lakh.

Chic Tex was listed as a textile company in 1996. The paid-up capital of the company was Tk 12.54 crore.

Almost the entire shares of the company were in the hands of general investors, who lost Tk 12.54 crore on the basis of the face value of the shares.