This is good summary articles of all the recent investment proposal... This is a gold mine for "Golden_asif" to promote Bangladahesh.
Mega FDI plans hang in limbo
Around half a dozen multi-billion-dollar proposals of foreign direct investment (FDI) in infrastructure, power, oil, gas and manufacturing sectors have been hanging for years due to complicated policies, government indecisions and bureaucratic tangles.The government is neither giving approval to these proposals nor refusing them, leaving the investors frustrated. This is also creating a wrong impression about the country and its investment prospects, sources said.
These investment proposals include Indian conglomerate Tata's $3 billion, United Arab Emirates-based Abu Dhabi Group's $2 billion, UK-based Global Oil and Energy Ltd's $2.9 billion, Malaysian Azimat Corporation's $900 million, and Contech Ltd's $900 million.
Sources said the proposal of Tata is pending for the decision of the next elected government while the rest are being delayed due to government indecision and policy complications.
Dr Debapriya Bhattacharya, executive director of Centre for Policy Dialogue (CPD), at a recent press briefing expressed his disappointment over such indecision from the government.
"There is no doubt that the flow of foreign direct investment in the country declined significantly due to political indecisions regarding some big investment proposals," he said.
According to sources in the Board of Investment (BoI), FDI declined by 16.5 percent during July-March in 2006-07 fiscal year with net FDI of $385 million against $505 million during the same period of the previous fiscal year.
"It is a great irony that a high powered government delegation recently visited Canada and Europe in search of foreign investment while many multi-billion-dollar investment proposals are pending--some of those for years," said a business leader.
"We have not seen any single large investment proposal getting approval from the Bangladesh government in recent times. The decisions on pending proposals are necessary for attracting further proposal," said a foreign investor.
A good policy guideline followed by action-oriented programme can bring huge FDI in the country, said a high official of a foreign investing company.
Terming the existing policy "very cumbersome", he alleged that the government takes a lot of time in the process for reviewing and studying opinions of different stakeholders before giving green signals to a proposal.
"Definitely the government will see the interest of the country, but that should be in the quickest possible time otherwise investors will divert to other countries," he said, adding that the government should also earmark the priority areas for attracting foreign investment.
According to sources, a number of foreign investors left the country being frustrated by the government's indecision, lengthy procedures and complicated policies regarding foreign investment in power, gas and oil sectors.
Even some foreign companies participated in the tender and were refused after reaching the final stage, the sources said.
"Any delay definitely sends wrong signals to foreign investors. If the decisions are made within the shortest possible time, it will give positive signals to potential investors," said S Manzer Hussain, resident director of Tata group in Bangladesh.
The Indian conglomerate has been languishing in government office corridors with its over $3 billion investment proposal since 2004.
A high official at the BoI said, "After receiving a big investment proposal from foreigners we send it to the ministries concerned and they often delay in responding."
The government prepared a guideline for the development of private sector infrastructure but it is so complicated that a company has to cross five to seven stages before getting the government approval, sources said. Such policies force the investors to wait for years. Decisions are also delayed with changes in the government hierarchy.
"Non-transparent industrial policy of our country is the main reason for delaying investment proposals. The foreign investors do not know where to go and how long it will take for materialising their proposals," said Mahmudul Islam Chowdhury, president of International Business Forum of Bangladesh.
He said "one stop service" is a must for foreign investment. The investors require approval of the ministries concerned even after getting registration from the Board of Investment. This often frustrates the foreign investors, he pointed out.
The most recent victim of such delay is the Youngone Corporation that had to wait for long 11 years to get the operational licence for its Korean Export Processing Zone (KEPZ).
The licence for establishing an EPZ was issued late last month although the proposal was first made in 1996. By this time, prospective South Korean investors in the KEPZ diverted their investment to North Korea as it provided the investors with a lot of incentives, sources said.
The KEPZ authorities will now have to take fresh initiatives to attract investors in the industrial zone, the sources added.
In 1996, the Youngone Corporation proposed that it would invest over $1 billion and set up an EPZ on the southern bank of the Karnaphuli in Chittagong exclusively for Korean investors.
A formal agreement was also signed between the government and the company and the government handed over 2,500 acres of land to Youngone in 1999. Youngone planned to establish a satellite township there and develop a total of 526 industrial plots.
The Tata has been waiting for more than three years to get permission for its over $3 billion investment.
Tata proposed to set up large plants in Bangladesh to produce steel, power and fertiliser using natural gas and a formal memorandum of understanding (MoU) was signed between Tata and the BoI in 2004.
Series of discussions were held between the government and the Indian giant on gas price and other related issues. The immediate past government could not reach any decision in this regard and left it for the next elected government.
"We are still waiting for the resumption of discussion because a lot of things have been done by this time and we do not want to waste those," Manzer told The Daily Star.
"The country has potentials and we would like to participate in exploring those opportunities provided we get a chance," he said.
Tata's last formal communication with the government took place in July last year. They were, however, informally informed that all documents regarding their investment proposal were sent to the chief adviser's office, Manzer said.
ABU DHABI GROUP
In September 2005, the Abu Dhabi Group expressed its intention to invest $2 billion in Bangladesh in various sectors including telecommunications, oil and gas, healthcare, tourism and pharmaceuticals.
The group signed the MoU in September 2005 formally committing to invest $1 billion but its officials told the media that their actual desire was to invest around $2 billion.
The group's cellular phone company Warid Telecom has recently started its operation in the country but the progress of the investment proposal in other sectors became slow.
A delegation of the group recently visited Bangladesh and talked with high government officials about their investment proposal. They also expressed desire to invest in the power and coal mining sectors.
In mid-2005, a Malaysian company proposed to spend over $900 million to construct the first expressway of the country.
Such expressway is vital for accelerating road communication between capital Dhaka and the country's premier port city Chittagong. It is also necessary for facilitating a deep-sea port at Cox's Bazar which is under the government's active consideration.
The BNP-led four-party alliance government almost finalised the proposal but the caretaker government stalled it to go for international tendering. This has delayed the investment at least for another year.
Another consortium of six companies led by local firm Contech Ltd proposed in February 2002 to build a 52km long underground rail in Dhaka at a cost of around $900 million on build-own-operate-and-transfer (BOOT) basis.
The high-powered Private Infrastructure Committee approved the proposal on September 6 last year.
The Japan Bank of International Cooperation, MTR of Hong Kong, JARTC of Japan were included in the consortium.
The proposal was one of the priority projects of the BNP-led government and was waiting for cabinet nod. But the project got stalled with the change of government.
The present caretaker government scrutinised the proposal again and the office of the communications adviser is yet to give its decision.
Global Oil and Energy Ltd, a subsidiary of the UK-based Mittal Group, recently expressed intention to invest a total of $2.9 billion in the country's petrochemical, coal, steel and power sectors.
The company singed MoU with the BoI expressing its desire to invest $1.5 billion in the petrochemical sector, $500 million in power, $500 million in liquefied natural gas (LNG) production, $300 million in coal mine development, and $100 million in oil exploration and production.
Meanwhile, a team led by BoI Executive Chairman Nazrul Islam recently visited Canada and Europe to attract foreign investment mainly from non-resident Bangladeshis.
Sources said 36 MoUs of investment proposals involving over $2 billion were signed during the visit.