Elevated expressway projects at Dhaka approved today
The cabinet committee on economic affairs today gave the communications ministry the approval to go ahead with the Dhaka city elevated expressway under the private-public partnership (PPP) initiative.
The elevated expressway project will be the maiden project taken under the PPP initiatives at a cost of $1.23 billion.
The proposed routes of the expressway are—Tejgaon-Old Airport-Magbazar-Malibagh-Jatrabari, Pan-Pacific Sonargaon hotel intersection-Katabon-New Market-Gulistan and New Airport-Kuril.
The construction work of the elevated expressway will be implemented in three phases after completion of the feasibility study and floating tender for the project, a meeting of the committee chaired by Finance Minister AMA Muhith held at the Cabinet Division said.
The finance minister, in the proposed budget for the fiscal year 2009-10, proposed an allocation of Tk 2,500 crore for the public-private partnership initiative to implement different projects in infrastructure, health and education sectors.
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
Govt to invite bids for metro-rail soon
The government today decided to invite bid for constructing metro-rail in the capital, Communications Minister Syed Abul Hossain said.
A ministerial committee took the decision and formed a seven-member body to fix the terms and conditions for the bidding and outline the process how feasibility study would be conducted.
The committee will submit its report within a week and it will then be placed before the cabinet committee on economic affairs, the minister told reporters after the meeting.
“On approval from the cabinet committee, we will fix terms and conditions for tender and feasibility study before inviting bids,” Hossain said.
“We will have to place the feasibility study along with the tender in order to save time”, the minister added.
He said the investors must carry out the feasibility study at their own expenses.
Hossain said the government would also construct elevated expressway.
Public-Private Partnership Budget Govt short-lists six very urgent mega projects
The government has identified six projects for implementation on a ‘very urgent’ basis under the proposed public-private partnership (PPP) budget.
Except construction of a deep-sea port in Chittagong, the rest of the projects are estimated to cost $11.05 billion or Tk 75,900 crore.
According to a finance ministry working paper on PPP, the projects are Dhaka-Chittagong Access Control Highway at an estimated cost of $3.023 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, two coal-based 900 megawatt power stations at the coastal areas at a cost of $0.9 billion, and the construction of Chittagong Deep-sea Port.
Finance ministry sources said apart from these big projects, a list of some small projects has also been sought incorporating projects like construction of link roads, flyovers, and underpasses.
Many local business groups already expressed interest in the big projects. For quick increase in investment in infrastructure, the government is going to take some initiatives under the PPP. Most of the investments will be in the private sector and the government will participate in it. To that end, in the next budget the government is likely to allocate
Tk 700 crore to Tk 3,500 crore depending on the volume of projects under the initiative.
The working paper estimates an investment deficit of $23 billion or Tk 1,58,700 crore in the period between the next fiscal year and 2013. An estimated investment deficit of $2.16 billion or Tk 14900 crore is expected to dog the next fiscal year.
A new fund titled ‘Bangladesh Infrastructure Investment Fund (BIIF)’ will be formed to ameliorate the investment deficit through projects under the PPP initiative. The funds will be raised from public and private sectors.
The working paper also proposes increasing BIIF through release of long-term bonds and shares on the capital market.
It also suggests collecting fund through turning loans into transferable debt securities through securitisation, and through sales of those. Besides, a special technical assistance fund might also be set-aside in the next budget for studying PPP projects.
Those who will invest in BIIF might be given tax waiver or allowed to pay a minimum tax.
Import of capital machinery under PPP initiatives might get duty-free facilities and tax holidays, or a minimum tax might be allowed on profits for a specific period.
An advisory committee comprising 11 to 13 members headed by the finance minister might be formed to provide guidelines for the PPP initiatives.
The sources said a final announcement regarding the issues will be made in the budget speech of the finance minister.
Tk 134cr for Padma Bridge land requisition
Communications Minister Syed Abul Hossain today handed over a cheque of over Tk 134 crore required for the land acquisition in Madaripur district for the construction of Padma Multipurpose Bridge.
He handed over the cheque to Madaripur Deputy Commissioner (DC) Shashi Kumar Singha at a function at the Shetu Bhaban this morning.
The money will be distributed within one month among the 2,000 people whose lands will be acquired for the construction of the bridge in the district.
S: The Daily Star
Nuclear Power: Dhaka to sign MoU with Moscow in mid May
A Russian minister is expected to visit Dhaka in the middle of May to sign a Memorandum of Understanding (MoU) regarding peaceful use of nuclear energy and development of related infrastructure, officials said.
Schedule of the visit will be finalised once the Prime Minister’s Office (PMO) approves a draft proposal regarding signing an agreement with Russia on setting up two 1,000MW nuclear power plants. Ministry of Science and Information and Communication Technology (ICT) had sent the proposal to the PMO in the second week of April.
Earlier Bangladesh and Russia had agreed on their proposals for nuclear power plant set up and signing an MoU after three-day talks held in Dhaka in the first week of April. At the talks the Russian delegation expressed their interest to assist in the project while Bangladesh articulated its desire to set up two 1,000Mw power plants.
“We are waiting for the approval of the proposal…..we are expecting that the PMO will soon give a positive nod,” Joint Secretary to the Science and ICT Ministry MM Neazuddin told The Daily Star yesterday.
The Russian delegation also submitted a proposal to its authorities regarding the matter. Both the countries will inform each other after their respective high-ups approve the proposals, sources said.
According to a paper prepared by the ICT ministry, the estimated cost of a 1,000MW nuclear power plant ranges between $1.5 billion and $2 billion. Experts say installation of such a unit will take at least five years from commissioning of the deal.
Bangladesh has been negotiating with several countries for setting up nuclear power units. Recently, Dhaka sought assistance from South Korea. France and China have also shown interest while Bangladesh has bilateral agreements on nuclear cooperation with the United States, France and China.
“The government, which assumed office with the promise to improve the volatile power situation, is willing to strike a deal with a country soon so that installation of the power unit can be started immediately,” said an official of the ICT ministry.
S: The Daily Star
Padma Bridge by 2013
Communications Minister Syed Abul Hossain yesterday said construction of much-awaited Padma Bridge would be completed by 2013 for which the necessary fund is ready.
The government would present inception report on the design of Padma Multipurpose Bridge tomorrow, the minister told the newsmen at a course launching ceremony of Brac University with its Vice-chancellor Prof Jamilur Reza Chowdhury in the chair.
Talking to The Daily Star, he said “I have already got a copy of the report with a design of the bridge to be formally made public with the presence of our all donor agencies on April 30,” adding, “Already we have funds in hands. Once we get more funds from donor agencies we will start construction of the bridge.”
Earlier on January 13, the minister said construction of the proposed bridge would start in 2011 on river Padma connecting Mawa in Munshiganj with Janzira in Madaripur.
The volume of land to be affected by the bridge construction in Madaripur district has already been assessed, said the minister and added that it is yet to be done for Shariatpur and Munshiganj districts.
He said Bangladesh is now facing the challenge of becoming a middle income country with limited agricultural land against the increasing population, adding, “the country need land both for agriculture and establishing basic infrastructures.”
Abul Hossain stressed the need for more industrialisation as Bangladesh is at the ‘crossroad of a new development path’ to become a middle income country.
The three-month long postgraduate certificate course on ‘Management of Land Acquisition, Resettlement and Rehabilitation’ (MLARR), designed by Brac University in collaboration with the World Bank, DIFID and AusAid, will start from May 17.
Australian High Commissioner in Dhaka Justin Lee also spoke on the occasion.
S: The Daily Star
Tk 5b to upgrade city traffic systems approved
The Communications Ministry Monday provisionally approved the Strategic Transport Plan (STP), which is expected to improve the transportation network in the city and its outskirts, and install an underground railway system, report bdnews24.com and UNB. “In the next seven days, the STP will be sent to the council of advisers for final approval. Once approved, the government will take an initiative to implement the plan,” Communications Adviser Ghulam Quader told the reporters after a meeting in his office. The STP will need two years to be implemented, and will cost $5.0 billion. The World Bank, Japan International Cooperation Agency and other organisations have agreed to finance the project, the adviser said. Quader also said, a decision has been taken to create 50 new roads through the city and a circular road around the city, and to introduce a uniform ticket system for public transport. The adviser said, to install a subway rail system between Dhaka and its outskirts, about 17,000 sq-km of railway has to be laid, which will take about 12 years. Once the implementation is underway many roads may be closed due to construction. “This will cause traffic jams, but the plan includes measures to address this. In some places flyovers will be built to ease the gridlock.” Quader also said, the STP includes steps to clear the traffic jams, created due to rail crossings within the city. He expressed his disappointments over the BRTC’s (Bangladesh Road Transport Corporation) activities during the previous government’s tenure, saying that the government is planning to reorganise the state-owned BRTC.
Dhaka Transportation Coordination Board Additional Executive Director SM Salahuddin said, the current transport system of the city is in a North-South direction. That’s why plans have been taken to build 50 more roads in an East-West direction. He believes that the realisation of the STP will transform Dhaka into a modern city.Earlier, Contech Limited, a local firm, had submitted the lowest bid in a tender called by Bangladesh Railway for constructing underground railway in Dhaka. In the proposal, the firm proposed to build a total of 52-km of subway in the city by spending some Tk 52.00 billion.
Source: The Financial Express.
