Sahara India creating New Dhaka

[mufi_02]

I don't know if it will be good or catastrophic. They are going to invest Rs. 80,000 crore in Bangladesh and create a whole new city. I am only providing the excerpts from a long article. It was published in reputed Times of India.
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Sahara set to bag Rs 80,000 crore new Bangladesh capital project
Piyush Pandey & Shubham Mukherjee , TNN |
Feb 24, 2012, 06.29AM IST

The group, which has been in the news more for issues relating to cricket and acquisition of an iconic London hotel, has silently created a bigger game plan, which includes getting into diverse areas like education, retail, mining, oil exploration and banking. Besides, it also includes entering newer geographies such as Bangladesh and Africa. But at the centre of it all is a Rs 80,000-crore project to create a new capital of Bangladesh-New Dhaka-and a real estate development project spanning five different locations in that country, land for part of which it has already acquired.

Roy by his own admission is most passionate about the media business (he is also launching tablets) but he beams as we change direction towards Dhaka. "We are going into Bangladesh in a big way. I have finalized work of Rs 80,000 crore. It is a country, where we have lots to do. I have sent the proposal to the Bangladesh PM for the New Dhaka project and hope to meet her next month." He is not asking much from the government either . "Give us a sovereign guarantee and we will not need money. We have selected 40 sq km of land, 50 km from Dhaka and it is available to us. We will get the land, build our own structures and sell it," he said. Sahara, which has real estate assets worth Rs 85,000 crore (according to the Sahara web site), also built a hill station in Maharashtra from scratch--Amby Valley.

Apart from Bangladesh, Sahara is also scouting for mining and exploration assets in Africa....

Full article - http://timesofindia.indiatimes.com/b...w/12013626.cms

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What are your thoughts?

[al Furqaan]

It might be a good idea if Sahara is a private company and its not part of Delhi's ploy in aquiring their 29th state.

[Equinox]

Could be a good thing. I really like what DLF (the Indian building company and sponsors of the IPL) have done with Gurgaon in India. But I don't understand what he means by "a sovereign guarantee." Any project of such magnitude requires heavy regulation.

[Shock]

Originally Posted by Equinox
Could be a good thing. I really like what DLF (the Indian building company and sponsors of the IPL) have done with Gurgaon in India. But I don't understand what he means by "a sovereign guarantee." Any project of such magnitude requires heavy regulation.

I think it means that they will be soul owner of the land, an Indian, in Bangladesh. They will do whatever they want. Bangladeshi Gov. won't earn anything. Public will not get anything either except buyers will give money to them theny will give apartment or whatever.

[Rabz]

An indian company coming to Bangladesh to acquire 40 sq km of land just outside Dhaka ?
Trust me, its not happening.

The Govt is way too deep into its own sh!t at the moment to allow for any such project. Plus the hotly debated current issues of BSF, Border Killing, Teesta weighing heavily into people's mind.

Though I might see why one certain lawmaker might be overly interested in this project as he/she might be lead to believe that this project will immortalize his/her name.

[Zunaid]

Originally Posted by Rabz
Though I might see why one certain lawmaker might be overly interested in this project as he/she might be lead to believe that this project will immortalize his/her name.

Who might that be? And will the new Dhaka be named after him/her?

[Isnaad]

I know the opinion of someone of my magnitude does not really matter, but here goes: I think it is going to be a disastrous plan if implemented.

[shaad]

Does anyone have issues with the manner in which Roy has framed this? He says he will not need money if the government gives him a sovereign guarantee. Now, someone can correct me on this; but I was under the impression that a sovereign guarantee implies that our government guarantees payment of all costs if the original obligor defaults.

Now, we don't know a priori who Roy's investors are, but we have had past experience with many, rather well-known businesses in both India and Bangladesh defaulting. This implies, that at the very least, BG will have to budget for an extra Rs. 80,000 crore, even if we don't end up paying it, despite Roy's words. Leaving aside other pro and con arguments, can we currently even afford this?

[F6_Turbo]

^ The sovereign guarantee is why this won't happen. Sure we can take into account certain risks(as all govts do in this sort of infrastructure project). But taking into account the volatility in the currency markets, and the political football anything to do with India becomes in this country - this is dead before it starts.

A MOU with certain stipulations /conditions would have been fine...but when most of the developing world is moving away from giving Sovereign Guarantees, we most certainly can't afford to give one.

And so, I hope this goes no further, and remains a pipe dream.

But I love how anything at all to do with India instantly becomes an issue for people in this country and forum. If this was being done by an Italian firm(what a joke that country is..corruption, graft, kickbacks, shoddy practices - they are right up there), but it would have been all...

WOW!
Looking 4ward to dis!
Bangladesh & Italy 4eva!

The guy saying bd govt. won't get anything, nor will the public, except for their apartments - ever bought property? Who do you think gets the VAT and Stamp Duty? And as for the public, what do they get when NAVANA/BTI/ANZ/Sheltech complete a project?

[tiger_bright]

why cant our own firms parcel out such a project?

this way, we internalize benefits in skills and profits.

[F6_Turbo]

Originally Posted by tiger_bright
why cant our own firms parcel out such a project?

this way, we internalize benefits in skills and profits.

I'm guessing $1billion commitment to a single project is not something local companies can dream of.

[tiger_bright]

so, divide the scheme between 10-20 companies.

[al Furqaan]

Originally Posted by Zunaid
Who might that be? And will the new Dhaka be named after him/her?

Honestly, the name "Mujibabad" has a very baller, Mogul-esque ring to it. I would fully support that name or a name change, while fervently being against the mindset which produced it. Similar to hating a the shot-selection of a top edged pull for 6, but loving the result (6 runs).

But anything with Bangabondhu just sounds gay as f**k.

[Rabz]

Originally Posted by Zunaid
Who might that be? And will the new Dhaka be named after him/her?

[Zunaid]

Originally Posted by al Furqaan
Honestly, the name "Mujibabad" has a very baller, Mogul-esque ring to it. I would fully support that name or a name change, while fervently being against the mindset which produced it. Similar to hating a the shot-selection of a top edged pull for 6, but loving the result (6 runs).

But anything with Bangabondhu just sounds gay as f**k.

Anything named after a person sounds gay as f**k unless they name somehtign after me and I'll change my mind.

The problem I see with naming everything after Bangabondhu is exactly that - naming everything after Bangobondhu. I know you have to show homage to your father, but ..... We are not North Korea. Thukku. Maybe we are. This personality worshiping where state controlled media and legislation prohibits any criticism is so 1984. How come we are so backwards? It does not matter whether it is Mujibur "I love one state party" Rahman or Ziaur "hang my opposition" Rahman. Bangladesh not only suffers from a cult of personality but a cult of dynasty. These power-hungry but low IQ women and their hanger-ons will not let rational and intelligent people rise up through the ranks and lead the nation. Sometimes, the people deserve who they elect.

[shuziburo]

I don't think they want BD as a state. অঙ্গরাজ্য is probably much more enticing. But, having a তাবেদার government also works quite nicely for them.

Originally Posted by al Furqaan
It might be a good idea if Sahara is a private company and its not part of Delhi's ploy in aquiring their 29th state.

[shuziburo]

I don't think anyone has ever disrespected our father of the nation more than the current AL. The man was flawed, but he loved the country more than all current AL leaders combined. Anybody remembers how shocked Mrs. Gandhi was when he demanded that Indian army left right after he came back from Pakistan?

Also, I don't think that the imbeciles realize that you dilute the respect when you start naming everything after one person. The best is to pick one prominent landmark and leave at that.

Originally Posted by Zunaid
Anything named after a person sounds gay as f**k unless they name somehtign after me and I'll change my mind.

The problem I see with naming everything after Bangabondhu is exactly that - naming everything after Bangobondhu. I know you have to show homage to your father, but ..... We are not North Korea. Thukku. Maybe we are. This personality worshiping where state controlled media and legislation prohibits any criticism is so 1984. How come we are so backwards? It does not matter whether it is Mujibur "I love one state party" Rahman or Ziaur "hang my opposition" Rahman. Bangladesh not only suffers from a cult of personality but a cult of dynasty. These power-hungry but low IQ women and their hanger-ons will not let rational and intelligent people rise up through the ranks and lead the nation. Sometimes, the people deserve who they elect.

[F6_Turbo]

Originally Posted by shuziburo
I don't think anyone has ever disrespected our father of the nation more than the current AL. The man was flawed, but he loved the country more than all current AL leaders combined. Anybody remembers how shocked Mrs. Gandhi was when he demanded that Indian army left right after he came back from Pakistan?

Also, I don't think that the imbeciles realize that you dilute the respect when you start naming everything after one person. The best is to pick one prominent landmark and leave at that.

But..But...how else are they going to prove how much they love the party?

[BANFAN]

The purpose of sovereign guarantees: States issue financial guarantees in order to financially promote projects that are deemed to be in the public interest. The guarantees are used as economic incentives for the capital market to finance the projects. In Sweden, for example, financial guarantees have in the past been used to promote agriculture, fishing, housing construction, shipbuilding and energy supply. From the beginning of the 90’s, they have primarily been used to alleviate the Swedish bank crisis and for promoting investment in the infrastructure.

Sovereign guarantees as a political instrument: There are two basic criteria that should be met before the use of sovereign guarantees. The first criterion is that a long-term assessment of the Beneficiary’s performance shows reasonable probability that it will generate sufficient income to recoup its costs. If it fails to generate the necessary income, the State merely defers final financing, since it will have to honour the guarantee at a future date. If, on the other hand, the project is likely to be capable of bearing its own costs, a financial guarantee is a good incentive for the capital market to finance the project. In such cases the State can use its own funds for other purposes and avoids adding to the State debt. The other criterion that should be met is that the capital markets are not willing to finance the project at a reasonable price without State support. Typically, this applies to large-scale projects that require long-term financing, i.e. loans with a term of more than 10 years, projects involving appreciable political risks and projects which are difficult for the market to assess due to its unique character. Where these criteria are met the State may choose between two methods, i.e. it may itself borrow the necessary amount in the credit markets and on-lend it to the project, or it may issue financial guarantees. In comparison with on-lending, financial guarantees have the following advantages: (a) Guarantees are very flexible. The borrowing may be tailored to meet the Beneficiary’s current needs as regards the amount, the maturity, the interest structure and the terms of repayment. Whereas, on the other hand, the funds are on-lent by the State, the borrowing must normally be adapted to total public sector borrowing in terms of foreign exchange, maturities and interest rate risks etc. (b) Guarantees bring the Beneficiary into direct contact with the credit markets, which offers an important spin-off, particularly with large-scale projects. Only through direct contact with the market will the Beneficiary have quick access to developments in financing arrangements and risk management. Moreover, it is probably easier to recruit a competent finance manager for a borrower who can obtain the required financing directly in the market than if he is referred solely to the State for his financial needs. (c) Guarantees lead to diversification. This is a great advantage when the State borrowing requirement is already large. In that case, small, cheap loans with a specific structure may not suit the State’s borrowing plans, at least not for that moment. Such loans may therefore suitably be channelled to the Beneficiaries. Depending on the borrowing requirement and administrative constraints, the State may also have decided internally on a minimum amount for loan transactions. Here too, the smaller loans may be used to finance guaranteed projects. Some investors may also prefer "sound" guaranteed projects to loans raised to cover the ”anonymous” budget deficit. Finally, it is probably a good thing even for the State to be open to some competition in its sovereign risk borrowing. (d) Loans raised under sovereign guarantees do not increase State borrowing. The larger the borrowing requirement at any given time, the more important this factor is.

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It's a good proposal and I would love to see this taking place and hope that the government will not make it an one sided affair for Shahara India. Government will have enough power to monitor the quality of the work, if they provide a sovereign financial guarantee. They must not give that up.

[Crisis]

Hey, maybe India is thinking of branching out it's army like the US. An army base in Bangladesh, few in Africa.....

[Shock]

Originally Posted by mufi_02
I don't know if it will be good or catastrophic. They are going to invest Rs. 80,000 crore in Bangladesh and create a whole new city. I am only providing the excerpts from a long article. It was published in reputed Times of India.
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[~snip~]

Full article - http://timesofindia.indiatimes.com/b...w/12013626.cms

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What are your thoughts?

Why does he need soverign opportunity from a foreign country? If he gets that from india, it is their business but not from different country like Bangladesh. What will be the quality of the structures he is planning to make? Will the structures withhold the tremor of Earth Quake? What is under that ground of the land they have chosen? Is it going to put negative influence in farming? Who will be the employees at every level? Will he pay taxes to bd government when he earns money by selling his product? Are we gaining more or loosing more? Lot of questions to be asked and need answering. If hasina doesn't consider these questions, she is preparing Bangladesh for a** f******!

And why does he need total freedom in a foreign country? This is the big question.

[shaad]

Dear Shock,

Please read Banfan's explanation earlier in the thread of what constitutes a sovereign guarantee. It does not, as you seem to believe, mean that Sahara India gets "total freedom in a foreign country." That said, you ask some good questions; and I think we can discuss the merits and demerits of such a proposal calmly and rationally, without using profanities, don't you?

[Shock]

So what is new in this matter? Any new news?

[mufi_02]

Update --

Bangladesh welcomes Sahara's satellite town proposal (Video Report)

http://www.indianexpress.com/video/i...-proposal/9692

[Equinox]

^Lol a private developer gives an interview where he hardly talks about the Sahara project and that gets translated as "Bangladesh welcomes Sahara's satellite proposal''