Bangladesh approaching to “Digital Bangladesh”

Finance Minister AMA Muhith yesterday unveiled a big information and communication technology (ICT) plan aimed at making technology accessible to all.

As per the proposed budget for fiscal 2009-10, the ICT and telecommunication sector will receive a total allocation of Tk 563 crore, which was Tk 265 crore in the revised budget for fiscal 2008-09.

The allocation includes Tk 142 crore annual developed programme for Science and ICT ministry, Tk 221 crore for post and telecommunication ministry, a special allocation of Tk 100 crore for ICT development and Tk 200 crore for Equity and Entrepreneurship Fund for ICT promotion.

The ICT industry insiders have praised the ruling party’s willingness to keep its electoral pledge of having a ‘digital Bangladesh.’

Muhith said automated system would be introduced in the administration, educational institutions, land and health sectors and tax administration phase by the phase within a few years.

He made a commitment to connect the country with the second submarine cable for providing internet service to more people.

Besides, initiatives will be taken to introduce e-governance and e-commerce by 2014 and 2012 to make the administration and business activities more efficient and transparent.

“We have to use information and communication technology extensively for accelerated development. Therefore, we are moving ahead with a dream of establishing digital Bangladesh by the year 2021. The transition to digitisation process will, on the one hand, help accelerate production and on the other hand, facilitate curbing corruption,” said Muhith.

He said they expect that employment in ICT sector will rank second only to textile sector by 2021.

“We have a plan to bring the least advantaged communities under the coverage of telephone and internet connectivity by extending its network and reducing the charges. We are well on the way in bringing all Upazilas within internet coverage in the next five years,” he said.

Muhith proposed withdrawal of value added tax (VAT) on internet services in educational institutions but mentioned nothing about the home users.

He gave assurance that incentive for software industries will be enhanced and steps will be taken to promote local software in both government and non-government sectors.

Although the local software industry exports products worth $25 million a year, the Tk 500 crore domestic market is dominated by foreign firms.

Welcoming the move, Habibullah N Karim, president of Bangladesh Association of Software and Information Services (BASIS), said,” If it is implemented, the local software industry will grow quickly.”

The finance minister made a commitment to introduce compulsory computer and technical education at the secondary and primary levels by 2013.

Bangladesh produces only 2,500 IT graduates a year but the number will increase if the government move is materialised, said Karim.

The finance minister said, “We would like to integrate land survey, land records and land management and bring the whole land administration under digital management. Once this initiative becomes successful, we shall be able to resolve many complex issues surrounding land administration, which will realise our goal of building a Digital Bangladesh.”

Meanwhile, Mostafa Jabbar, president of Bangladesh Computer Samity, opposed the proposal for imposing 25 percent import duty on mobile phone sets.

Low-priced handsets should be exempted from such duty, otherwise rural people will be deprived of the technology, he added.

Bangladesh Govt going for long term power & energy

Touching upon energy and power issues in his budget speech, the finance minister outlined a long-term vision to solve the gas and power crisis at present and in future, and as part of it proposed an allocation of Tk 4,310 crore for the sector in the next fiscal year (FY).

The allocation is 48 percent higher than that in the revised budget for the current FY.

The finance minister’s speech flashes the government’s consciousness about various issues related to energy, usually overlooked in the past. For instance, he talked about environment friendly energy technology, greater use of renewable energy like solar power, tapping coal in an environment friendly way, setting up a gas development fund for Bapex, conservation of energy and greater emphasis on partnership between private and public sectors.

AMA Muhith also tabled government plans to import gas from neighbouring countries through pipelines on the basis of mutual cooperation.

He adds, “We are continuing dialogue with our neighbouring countries to import power for mitigating the power crisis on a short term basis.”

He declined to give a definitive deadline for building a nuclear power plant but said the government plans to implement a 1,000 megawatt nuclear power plant in Rooppur with self-finance.

The government is seriously considering using coal along with gas for power generation, Muhith said. “We shall set up coal fired power plant using environment friendly technology for extraction of coal. If required, coal may be imported to run these power plants.”

He said the government is also considering importing environment friendly energy technology in the “context of current level of environmental degradation”.

To enhance capacity of the national oil and gas exploration company Bapex, the government is considering setting up a gas development fund. Bapex’s Shahbajpur gas field in Bhola is ready to supply 45 million cubic feet per day (mmcfd) gas for a 250 MW power plant proposed to be built there.

The country’s gas reserve is depleting. The proven reserve now is 7.3 trillion cubic feet (tcf) while probable reserve is 5.5 tcf more. This situation demands that the country must find new gas fields or face diminishing gas supply from 2011. For this, it is important to take up on-shore and offshore exploration for new reserves.

The government is also looking into the prospect of viable extraction of coal at deeper layers. “A time-befitting energy and coal policy is nearing finalisation,” he mentioned.

To ensure energy security, the government is working for a three-fold increase in oil refinery capacity.

Muhith pointed out that when Awami League came to power, it was aware of a huge gap between demand and supply, but it was not aware that the snag is not only in the supply of gas and generation of power but also in the transmission of power. There had been ’serious neglect’ to taking up new initiatives regarding known gas fields.

As a result, the present government has been compelled to set up “expensive dual-fuel power plants that can use diesel or furnace oil and also gas,” the finance minister said.

“Only 45 percent of our entire population have access to power. Currently our per capita power consumption is only 172 kwh, which is 325 kwh in Sri Lanka, 408 kwh in Pakistan and 665 kwh in India.”

Against the average power demand of 5000 MW at present, the existing power plants can generate only3800 MW, he said. “We are determined to take appropriate steps to increase power generation assuming its demand to be 20,000 MW by 2021.”

This year additional power will be generated by four projects under public sector and 440 MW by 11 projects under private sector. The bidding process for building 450 MW Bibiyana power plant is underway.

“If we go ahead as planned, we hope that by 2013, 2810 MW of power will be produced through 13 projects under public sector and another 1,350 MW through three private sector projects,” the minister said.

The government is also working for efficiency enhancement of management and efficient use of power. During the boro season this year, the government through load management diverted 300 MW power for irrigation to achieve bumper boro harvest.

“We have taken up a Tk 105 crore project to produce energy saving bulbs. Once this project is implemented, there will be a saving of 350 MW electricity,” Muhith said.

For transmission-distribution of power, the government has a three-year plan. An additional 837 km power grid line, 17 sub-stations and 15,000 km distribution line will be built.

The country now produces 20 MW power from renewable energy, mainly in rural areas. Now the government is taking initiatives for use of solar energy and biogas technology also in urban areas.

To address gas issues, the government plans to drill in 2009-11 period five development wells, four work-over wells and four production wells to get an additional 208 mmcfd. Offshore exploration will start soon.

7 ambitious communications projects picked for urgent implementation

Finance Minister AMA Muhith yesterday, for the first time, proposed an allocation of Tk 2,500 crore for the public-private partnership initiative to implement different projects in infrastructure, health and education sectors.

The government yesterday also presented a position paper to the Parliament on “New Investment Attempts in Public Private Partnership Initiative”.

The finance minister in his budget speech said, “We are going to take special initiatives to involve the private sector under Public Private Partnership (PPP) to meet the probable investment gap in infrastructure development and maintenance alongside the government’s investment.”

Out of the total Tk 2,500 crore allocation, Tk 2,100 crore is for ensuring government partnership in equity and loan assistance from the government to different projects.

The Viability Gap Funding will receive Tk 300 crore which is to be given as subsidy to construction of power plants, hospitals, schools and roads to attract investment.

A total of Tk 100 crore has been earmarked in the budget for pre-feasibility study of the projects.

Muhith said, “The challenge before us, is to set up an institution for

preparation and implementation of PPP budget. We hope that the PPP budget management will be fully operational by September next.”

The government in the position paper identified seven projects for “very urgent” basis implementation under the proposed public-private partnership (PPP) budget.

Except the construction of a deep-sea port in Chittagong, the rest of the projects are estimated to cost $13.85 billion.

The PPP projects are Dhaka-Chittagong Access Control Highway at an estimated cost of $3.02 billion, construction of a sky rail around Dhaka city at a cost of $2.8 billion, construction of a Dhaka city underground railway at a cost of $3.1 billion, Dhaka city elevated expressway at a cost of $1.23 billion, Dhaka-Narayanganj-Gazipur-Dhaka Elevated Expressway at a cost of $1.90 billion, four gas or coal-fired 450 megawatt power stations at a cost of $1.80 billion, and the construction of Chittagong Deep-Sea Port.

The position paper also mentioned some other projects having public importance. Of those Bus Rapid Transit (BRT), Articulated Bus Service, Bus Route Francise (BRF) in the communications sector, cancer or other hospital construction in health sector, setting up secondary school, construction of dormitories, health centre, auditorium and gymnasium in public universities, upgradation of existing degree colleges and setting up research institutions.

The position paper estimates an investment deficit of $28.06 billion in the period between the next fiscal year and 2014. An estimated investment deficit of $1.04 billion is expected to dog the next fiscal year.

The position paper also proposed tax waiver or a payment of minimum tax under the PPP initiative.

Import of capital machinery under PPP initiatives will enjoy duty-free facilities and tax holidays, or a minimum tax might be imposed on profits only for a specific period.

The mode of project implementation under the PPP initiative will be on the basis of Build-Own-Operate (BOO), Build-Operate-Transfer (BOT) and Build-Own-Operate-Transfer (BOOT).

Adviser to the previous caretaker government Dr Akbar Ali Khan told The Daily Star, “If the government cannot improve its administrative efficiency and capacity for negotiation the public-private partnership concept would not succeeded.

The concept is nothing new. The Awami League government of Sheikh Hasina in its earlier stint took a similar initiative. What is new this time is that an allocation is being made for it in the budget, he added.

Earlier the investment included only the infrastructure sector but this time it would include the health and education sector.

Under the initiative the World Bank provided a fund of about 450 million dollar and the loan was given in very soft terms. Despite this, half of the fund was not utilized and the WB had to take the unutilised money back, Akbar continued.

In case of big projects like monorail, elevated express highway the question of acquiring land is involved. Necessary laws have to be formulated and enacted in this regard.

In the health sector if private clinic is established common people will not be benefited, he said.

World Bank senior economist Zahid Hussain said, Bangladesh needs to reduce its reliance on the Annual Development Program (ADP) as an instrument to deliver energy, infrastructure, and social services.

He said experience also shows that there is no unique formula for developing a sound PPP framework. However, successful programs are characterised by clear policy and legal frameworks for PPPs. The PPP unit needs to be staffed with technically sound and experienced negotiators with specific knowledge on project design, financing and management.

East Coast Group Chairman and Managing Director of Mobil Jamuna Lubricant Ltd (MJLL) Azam J Chowdhury said the public-private partnership in large infrastructure and energy projects must be free from political influence.

He believes that private-public partnership will act as a major incentive for Foreign Direct Investment (FDI).

Burma to sell electricity to Bangladesh

A Burmese company is keen on setting up a 500 MW hydroelectric power plant in Arakan State and export electricity to Bangladesh. This was announced by Bangladesh Foreign Minister Dipu Moni yesterday.

During her recent visit to Burma she held discussions with the authorities of a local company the Shwe Taung Development Co. which has leased land in Arakan State to set up two power plants which will export electricity to Bangladesh in order to meet its rising demand.

A team of technical experts from the Ministry of Energy is expected to visit Arakan State in the first week of July for a feasibility study on the prospects of electricity import, she said at a seminar on Bangladesh-Burma Relations organized by the Bangladesh Institute of International Strategic Studies ( BIISS).

The quantum of bilateral trade between the two countries will be increased from the present 140 million US dollar to 500 million US dollar during the 2009-10 fiscal year.

Establishment of direct banking facilities will also be beneficial to the businessmen of both countries, she said.

On road communication Bangladesh is seeking a highway and a railway route linking Burma, other Southeast Asian countries and China. This is underway. Moreover, an airline between Bangladesh and Burma will start operating very soon. To facilitate trade and tourism, bi-weekly direct flights on the Mandalay-Cox’s Bazaar route can be operated by any Bangladeshi private airline, Dip Muni said.

The Bangladesh government is also preparing and updating a list of Muslim refugees from Burma who number around 22,000, at Burma’s request for repatriation to their home country, she said.

A political observer in exile says, there is no hydroelectricity in Arakan State for the Arakanese people under Burmese rule till today. This despite the abundant rivers, creeks and water-falls which can help generate hydroelectricity in the state. Natural gas is also available in great quantity in this state. Despite all this the Arakanese people are in a state of extreme poverty.

S: narinjara.com