Bangladesh News Bangladesh Economy & Development Thread

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The project was completed by the 16 Engineer Construction Batallion under the Engineer Construction Brigade of the Bangladesh Army, project officer Major Ishrakul Haque told TBS.

Under the project, 10 bridges, 10 culverts and four viewpoints have been constructed at a cost of Tk474.40 crore during 2017-2022 period, he added.

Besides, cross drain, site drain, retaining wall, earth water dam, and road sign have also been constructed. Attractive spots have been developed by the wavy roadside for tourists, the army officer added.

"The construction of the road will increase the agriculture, education, and health services facilities for the locals. Besides, the development of the tourism industry will also play a role in improving the quality of the local's life," Major Ishrakul said.

However, passenger transports have not yet started operation on the road. Locals travel on rented motorcycles and transport local agricultural products on small mini trucks.

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Kurukapata union was once a remote bordering area of Alikadam upazila. Due to a lack of road connectivity for a long time, the locals had to come to the upazila headquarters on foot or by boat.

During the monsoon, all means of communication would have been disconnected from the upazila headquarters. As a result, the residents of the area suffered in receiving medical care, education and marketing agricultural products.

The Alikadam-Poamuhuri road was constructed on the bank of the Matamuhuri river.

There is a river on one side and the natural beauty can be enjoyed on both sides of the road. Some aesthetic viewpoints have also been constructed on several hilltops.

Major Ishrakul said that the road has already changed the socio-economic life of different ethnic minority people including Mro and Tripura communities. Hill weavers and other handicraft markets are expanding while it has unveiled the hidden beauty of Bandarban.

He said that the local economy would expand further centring the tourism industry development.

Due to the development of the communication system, local fruits and crops are now reaching the city.

Moreover, the Alikadam-Janalipara-Kurukapata-Poamuhuri road has been connected to the 317 km border road. As a result, the road will play a role in protecting the country's territory increasing security on the border.

Menrowa Mro, a member of ward 7 of Kurukpata union, said that in some areas people would suffer from diarrhea before the beginning of the monsoon season every year. As Kurukpata is a remote area, the residents were deprived of medical facilities. There was no way to take people to hospitals. Some children even die of diarrhea, he added.

"From now on, the road will facilitate quick treatment for the people," he said.

Rambati Tripura and Ram Bahadur Tripura, residents of Jira Para in the 12 km area, said that since the construction of the road, locals have started cultivating various fruits along with zoom cultivation.

Earlier, if there was an opportunity to garden, no one would implement it in absence of a transportation system. Locals have started cultivation of various fruits too.

Besides, ginger and turmeric cultivation is also increasing in different areas than ever before. Now the traders come to the neighborhood to purchase ginger and turmeric direct from the farmers and at a fair price.


Germany's Tailwind Shipping Lines has announced the launch of a direct container shipping line between Chattogram port and Europe, with a specific focus on the transportation of textile goods, according to a recent statement from the carrier.

The new service, named the Tiger Express service (TEX service) after the Bengal tiger, will be the second European shipping line after an Italian shipping company which launched direct shipping service from Chattogram port in February last year.

The service is expected to have a fast transit time of fewer than 20 days between Chattogram and Barcelona, which will help cut down time and costs for traders. The new shipping line will also call on smaller ports in both Barcelona and the Dutch port town of Moerdijk, enabling goods to be loaded onto trucks quickly and transported directly to their specific destinations.

"Owing to the ships we deploy, we can reach the region without any intermediate stops or transshipment," says Wolf Tiedemann, board member at Lidl Stiftung & Co KG responsible for logistics and also managing director of Tailwind Shipping Lines.

"Especially thanks to direct connection between Bangladesh and Europe, this will represent a huge increase in efficiency, which we will also use to boost the reliability of the supply chains for our customers," he said, adding that this kind of smaller service also ensures greater proximity to customers and the ability to quickly meet their requirements.

Tailwind Shipping Lines, a subsidiary of Lidl International, which runs a discount retailer chain in over 11,000 stores across Europe and the United States, will offer shipping freight for Lidl goods, as well as for customers from the fashion and textile sectors, with other customers also able to derive the benefits of the service.

The company said the new service will represent a huge increase in efficiency, which will be used to boost the reliability of the supply chains for customers.

"We've got all the permissions from the port authority and Tailwind will launch direct service at the end of the next month," Nazneen Sultana, managing director of Unitrans Container Limited, the local agent of Tailwind, told The Business Standard on Saturday.

According to shipping industry officials, 40% of Bangladesh's import and export goods are transported from Chattogram to Colombo port, while the remaining 60% go through Singapore, Malaysia's Port Klang, and Tanjung Pelepas. Chattogram Port handles 92% of the country's import-export trade alongside 98% of container shipments.

Of Bangladesh's $52 billion exports in FY22, garments accounted for nearly 82%, with over 50% of exports going to Europe in that fiscal year, according to BGMEA data. The direct connection between Bangladesh and Europe offered by Tailwind's TEX service is expected to represent a significant boost in efficiency for these exports, as well as for other customers using the service.

Chattogram Port Authority Secretary Md Omar Farooq said the authorities are encouraging direct shipping service as it takes only 15-20 days to reach destination countries instead of at least 40-45 days through transshipment ports.

He also said shipment cost will be reduced significantly and importers can expect their goods to reach them faster.


The maritime sector of the country has started to demonstrate enormous possibilities and the government is keen to harness the potential, said State Minister for shipping Khalid Mahmud Chowdhury.

While inaugurating four new oceangoing bulk carriers of Meghna Group on Sunday in Chattogram, the state minister said the government is working to make the local shipping sector more business-friendly.

At the Patenga container terminal of Chattogram port, Khalid Mahmud Chowdhury said that Meghna Group has been able to expand its fleet to 22 in the past decade due mostly to the support of the government. "We are working to scale up maritime investment further."

He said the government has increased the number of maritime academies to four and mulling four more national maritime institutes to produce skilled seamen.

The 200-metre Meghna Victory, the largest privately-owned cargo carrier in Bangladesh flagged off yesterday, registered a capacity record for the newly constructed Patenga container terminal. Other vessels inaugurated Sunday are MV Meghna Prestige and Meghna Hope Meghna Progress.

On the occasion, Chattogram Port Authority Chairman Rear Admiral M Shahjahan said that Bangladeshi-flagged vessels currently carry goods accounting for nearly 5% of Bangladesh's external trades. The country needs 500 ships to transport 100% of the external trade cargo.

He said the number of Bangladeshi vessels has increased to 95 from 38 in the last four years.

The Chattogram Port Authority chairman hoped Bangladesh will soon be able to transport 100% of the external cargo on its own and earn foreign currency by transporting products of other nations.

He also assured businessmen of resolving a recent issue over transporting goods by foreign vessels soon.

Meghna Group Chairman Mustafa Kamal said Bangladesh spends around $10 billion annually for the transportation of goods in import and export trade by sea. Foreign shipping companies used to take away a large chunk of the spending. But the country is now saving $700-$800 million a year by using available Bangladeshi ships.

He said the Meghna fleet is contributing significantly to the growth of the country's external trades.

However, Mustafa Kamal urged the government to provide more policy support to advance the maritime sector. He suggested introducing a one-stop service to ease the ship registration process, call sign, and the easy obtaining of a station licence.

He also proposed waiving the 1% Advance Income Tax (AIT) on the purchase of ships and withdrawing the condition of non-resale within three years of purchasing a ship.

Commodore Md Nijamul Haque, director general of the Department of Shipping, was present as guest of honour at the event.

Chairman of Al Haramain Group Mahtabur Rahman, Chief Executive Officer of HSBC Bangladesh Md Mabbub ur Rahman and Chattogram Chamber of Commerce and Industry President Mahbubul Alam were also present.

HSBC Bangladesh has arranged $71 million in finance for the four vessels. According to the Meghna Group, the bulk carriers were built by a joint venture of Japan and China named Jiangsu Yangzi-Mitsui Shipbuilding Co. Ltd.

The capacity of each of these oceangoing vessels is 66,000 deadweight tonnage.

 

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ExxonMobil Corporation, one of the world's largest oil and gas companies, has expressed interest in exploring gas in all the open deepwater offshore blocks and some onshore blocks using the required two- and three-dimensional seismic surveys.

The company plans to implement the proposal, including production sharing contracts (PSC) negotiation and well exploration, in three phases over six years.

The proposal comes when Bangladesh is about to finalise its model PSC, under which International Oil Companies (IOCs) will be offered larger output shares and increased gas prices.

Meanwhile, Bangladesh has also started its much anticipated multi-client survey, which is scheduled to be completed by next May, to acquire data on hydrocarbon reserves in Bangladesh's part of the Bay of Bengal.

Contacted, Bangladesh Oil, Gas and Mineral Resource Corporation (Petrobangla) Chairman Zanendra Nath Sarker said, "ExxonMobil has placed a primary proposal to negotiate on offshore blocks in deep-sea as well as for some onshore blocks.

"The proposal is now under consideration," he added.

ExxonMobil wants all open blocks both in bay, land

In its proposal, ExxonMobil expressed interest in direct negotiation for mutually acceptable PSCs covering all open deepwater blocks, data access for evaluation of selected onshore blocks needed for direct negotiation proposal, and participating in the planned tender for the offshore blocks.

It chalked out a timeline in three phases from this year to materialise the plan.

In the first phase, the Texas-based international oil and gas company is also eying to complete PSC negotiation and 2D seismic survey in two years.

Under the second phase, it intends to complete 3D seismic data acquisition, processing and interpretation on high-graded blocks in three years.

In the final phase, it plans to start drilling exploration wells, which will continue for three years.

At present, Bangladesh has 26 open offshore and 22 onshore blocks. Of these, 11 offshore blocks are located in shallow water and the remaining 15 are in deep waters.

Currently, the government has PSC for two shallow sea blocks – blocks SS-04 and SS-09, which ONGC Videsh Ltd (OVL) and Oil India Ltd (OIL) are jointly exploring.

Of the total onshore blocks, only four are awarded to IOCs. USA oil giant Chevron has been exploring and producing natural gas in three onshore blocks –12, 13 and 14 – while Singapore's KrisEnergy is active in block-9.

USA giant interested in survey jointly with TGS

Apart from this, ExxonMobil also wished to work directly with Norwegian survey company TGS and US firm Schlumberger. This joint venture is now conducting the multi-client survey in the Bay of Bengal to acquire a denser grid of 2D data during the initial acquisition phase.

Norway and US, joint venture firms, started the survey on 4 January this year and are scheduled to complete it by next May, said engineer Md Shaheenur Islam, director (Production Sharing Contract), Petrobangla.

Regarding ExxonMobil's wish to work with the TGS-led firm, Shaheenur said it depends on the decision of the Energy and Mineral Resource Division.

Stating its competency for the job, ExxonMobil said, "Any hydrocarbon accumulations in the deepwater offshore area in question are most likely to occur in stratigraphic traps, and ExxonMobil has the had the most successful track record in industry of exploring for such traps in the last decade, based on its exploration program in deepwater Guyana."

In contrast, the bulk of the anticipated onshore traps are structural, and ExxonMobil also has extensive experience in such settings, it added.

New PSC offers increased benefits to IOC

Petrobangla has drafted a new model PSC offering a larger output share and increasing the gas price to attract IOCs in the local fields.

As per the existing PSC, the rate of the purchase price of IOC-produced gas is below $3 per thousand cubic feet (Mcf). But in the proposed PSC, the price has been proposed to increase by three times to around $10 per Mcf, reads the draft PSC.

Besides, the government share in the "profit gas" also proposed to drag down to 40-70% from the previous 55-80% from the previous PSC.

Like the existing PSC, the new model PSC also allows the IOCs to export offshore gas after meeting domestic demand.

Regarding the updated PSC, Md Shaheenur Islam said it was now under legal scrutiny to get the final approval.

 

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The Sheikh Hasina-led government has rolled out massive projects to develop the network of roads and highways in Bangladesh over the last decade. Their efforts were crowned by the inauguration of Padma Bridge, the largest bridge in the country’s history, with a vision of easing the movement of people and goods and making transport less expensive.

This development has had some success in its intended goal, but there have been unintended consequences for another sector that transports people and goods and is now worried about its survival – civil aviation.

In order to survive, airlines operating domestically are actively considering and lobbying to expand and open new routes, but their regulator, the Civil Aviation Authority of Bangladesh, has, at least for now, been unmoved.

In its argument, the Aviation Operators Association of Bangladesh, the organisation that represents airlines, said the domestic market for passengers and air cargo has shrunk considerably with the latest development of roads and highway infrastructure. To address this problem, airlines want to open new routes and need new infrastructure, especially airports, to do so.

The association is actively lobbying the CAAB to make those airfields -- either abandoned or operating with limited capacity -- fully operational.

The regulator, however, said making those airports operational is not currently on its list of priorities. Instead, CAAB insiders say they are far more interested in developing the services of already operational airports.

OVERVIEW OF DOMESTIC AVIATION IN BANGLADESH

Bangladesh has three international airports in Dhaka, Chattogram and Sylhet, and five active airports for domestic operations -- Rajshahi, Syedpur in Rangpur, Barishal, Jashore and Cox’s Bazar.

Apart from these, the Khan Jahan Ali airport in Khulna is still under construction, while airports in Dhaka’s Tejgaon, Bogura and Moulvibazar’s Shamsernagar do not have the necessary clearance for civil aviation.
Airports in Thakurgaon, Pabna’s Ishwardi and Cumilla have been shut down.

There are more abandoned airstrips in Patuakhali, Feni and Tangail and some other parts of the country, which were built during the British era for military aviation, especially to defend its borders when Imperial Japan launched its infamous Burma, currently Myanmar, campaign.

According to independent aviation experts in Bangladesh, domestic air travel in Bangladesh during the pre-independence era started and later developed on the backbone of some of these military airstrips.
The sector’s stakeholders are seeking CAAB’s intervention to take the initiative to restore these abandoned airstrips and those airfields that are partially operational or inactive.

AOAB’s Secretary General Mofizur Rahman broke down the numbers for bdnews24.com, saying the woes of domestic airlines became much more visible after the pandemic.

“Before the pandemic, the domestic market for civil aviation was expanding at least 10 percent a year. The Padma Bridge opened after the pandemic, and suddenly there was a massive drop in passengers on our Barishal route and we are running very few flights. The number of passengers to Jashore has gone down to only 20-25 percent, which forced us to bring the number of daily flights from 15 to five or less,” he said.

As soon as the tunnel under the Karnaphuli River and the rail lines to Cox’s Bazar are fully operational, they will be forced to shut 70 percent of the flights to the beach town, the route that accounts for the bulk of the revenue for AOAB members, according to Mofizur, also the managing director of domestic carrier Novo Air.

WHAT IS THE FUTURE OF DOMESTIC AVIATION?

Mofizur, a former airman for the Bangladesh Air Force, strongly believes there is no scope to expand the domestic aviation market with the current infrastructure and routes, which is why airlines are pushing for new routes.

He laid out the prospects of Rangpur’s Ishwardi, Moulvibazar’s Shamsernagar and Thakurgaon as test cases.
“Ishwardi has a large agro-based economy and is home to the Rooppur Nuclear Power Plant, while hundreds of resorts and leisure centres have developed in Moulvibazar over the last decade. The airport in Thakurgaon has some tourism prospects for the farthest northern districts. We strongly believe these three possible routes can open up new opportunities for us.”

Mofizur also highlighted the commercial and eco-tourism prospects of the under-construction airport in Bagerhat.

“The Khan Jahan Ali Airport has massive potential, as it’s the closest airport to the Sundarbans, the Mongla seaport and the Rampal Power Plant. Lots of other businesses are developing in the surrounding area which, we believe, will also help grow our business,” he said.

The civil aviation regulator, however, does not share the same sentiment.

CAAB Chairman Air Vice-Marshal M Mafidur Rahman was clear when he said the regulator has no plan to revive or redevelop abandoned airstrips or expand airfields with limited capacities.

“At present, we are solely focusing on developing the services and infrastructure of existing operational airports,” he said.

Mafidur confirmed that the regulator is working to seize official control of the land of those airstrips and airfields.

“For years, there was illegal encroachment on the land. We are working to remove the illegal encroachers and set up boundary perimeters on the land.”

However, he did not wholly dismiss the idea of expanding the scope of civil aviation in the future.

“Once we complete the tasks on our current priority list, we will commission exploratory studies to find possible locations for new airports.”

 

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Prime Minister Sheikh Hasina inaugurated 23 projects worth Tk570 crore in Mymensingh on Saturday (11 March).

After inaugurating the projects, the premier attended a grand rally organised by district and metropolitan units of the AL at the Circuit House.

The projects, among others, include 4-storey academic buildings in 21 schools and colleges, sanitation projects in 32 municipalities, Sheikh Kamal indoor stadium, and five bridges.

The premier also laid the foundation stone for 14 more development projects in the district.

The projects worth Tk 2,762 crore include the development of the road and drainage network of Mymensingh and the construction of 7 regional offices for the Bangladesh Public Service Commission among others.

 

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A 27-kilometre road is being constructed from Cox's Bazar's Chakaria to Matarbari to facilitate road connectivity with the under-construction Matarbari Deep Sea Port.

The tendering process of the Tk8,821 crore project is currently in progress. The physical work of this project is scheduled to begin in July this year.

Meanwhile, the authorities concerned have completed the land acquisition process and the work to fill the land with mud and stone is underway.

"We want to build the road before the port opens in 2026. Technical evaluation of submitted tenders is now underway. The financial evaluation will be conducted after that. After selecting qualified bidders, we will be able to start the physical work in July", said the project director Zakir Hossain.

Once the road is up and running, goods to and from the port can be easily transported across the country. The construction period of the road was set from January 2020 to December 2026 with a one-year defect liability period, he said.

A Japanese company Oriental Consultant Global Company Ltd prepared the field survey report, design, costing and international tender for the project.

According to Oriental Consultant's report, out of the 27.2 km long road, a number of bridges will be made with lengths totalling 10 km. A four-lane road will be made towards the seaport end and the rest of the road will be two-lanes. Besides, three rail overpasses will be constructed so that road traffic is not obstructed due to railway lines.

About 26 km of the Port Access Road will be two-lane including 14 bridges and another 1.2 km will be a four-lane North-South Connector Road, said Zakir Hossain, who is also an additional chief engineer of the Roads and Highways Department (RHD).

The project will connect Matarbari deep sea port with the Chattogram-Cox's Bazar four-lane highway. The 1.2km four-lane road will be built from Matarbari Port to Dhalghat Roundabout and the two-lane 26km road will be constructed from Dhalghat to Fasiakhali. This road will be upgraded to a four-lane highway in the future, the project director said, adding that the project will be implemented in three packages — Civil Works (CW) 3A, CW 3B, and CW 3C.

Among the total funds of the project, Japan International Corporation Agency (Jica) will provide loan assistance of Tk6,150.19 crore while the remaining Tk2,671.15 crore will be spent from government funds.


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Government agencies, including the Roads and Highways Department, have been actively working to finish the preparatory works on major highway upgradation projects as the government wants to begin upgrading the Dhaka-Chattogram highway into eight-lanes by the end of 2024 or early 2025.

Upgrading the Chattogram-Cox's Bazar highway into four lanes is also a priority for the government because of the significance of the Matarbari deep sea port.

Officials of the Road Transport and Highways Division said they are looking to finalise funding details and designs at the earliest.

Among these, a loan agreement will be signed with Japan International Cooperation Agency (Jica) this month for the construction of four bypasses and one elevated bypass on five points of the Chattogram-Cox's Bazar highway. Besides, another loan proposal to upgrade the Chattogram-Cox's Bazar highway into four lanes, under a separate project, is expected to be sent to Jica within the next two months.

According to preliminary estimates of the Roads and Highways Department, the total cost of development of these two national highways will be Tk 95,650 crore.

On the Chattogram-Cox's Bazar highway, bypass roads will be constructed at Patia, Dohazari, Keranihat, Amirabad and Chakaria while the elevated bypass has been planned for Keranihat. Construction of these bypasses is expected to begin in the next fiscal year.

Jica will provide a Tk4,533.00 crore loan for this project, said Economic Relations Department (ERD) Additional Secretary AKM Shahabuddin.

Survey work on this project is also in its final stage while the Development Project Proposal (DPP) is being prepared.

Shyamal Kumar Bhattacharyya, Additional Chief Engineer, Roads and Highways Department, said that the DPP will be sent to the Planning Commission soon for approval.

Meanwhile, the Preliminary Project Proposal for upgrading the Chattogram-Cox's Bazar highway into four lanes was sent to the Planning Commission last February.

Md Ataur Rahman, Additional Chief Engineer (Chattogram Zone), Roads and Highways Department said, "If the Planning Commission feels that the project will be implemented with funding assistance, the preliminary proposal will be sent to the development partners through ERD to secure foreign loans."

The total cost of upgrading this highway into four lanes is estimated at Tk18,000 crore.

Officials of the Roads and Highways Department said that the government's aim was to implement public-private partnership (PPP) for the project. But it was later decided that it will not be done under PPP in the interest of quick implementation.

Officials said JICA has shown interest in financing this project.

Meanwhile, officials of the Planning Commission said that a meeting will be held on the PDPP of the Chattogram-Cox's Bazar four-lane highway development project on 16 March, when the decision on funding of the project will be taken.

The first feasibility study on the four-lane upgradation was completed in 2015, while in 2021 the engineering department of Bangladesh University of Engineering and Technology conducted another study.

The Chattogram-Cox's Bazar highway will be developed around the Matarbari deep sea port. Therefore, the plan is to build the four-lane highway within the next three years, keeping pace with the deep sea port.

Officials say that 110km of 169km Chittagong-Cox's Bazar highway have to be developed into four lanes as eight kilometres from BahaddarHat to Shikalbaha have already been developed into four lanes. Besides, a 10-km stretch from Cox's Bazar to Bankakhi has also been developed into four lanes.

Planning Commission officials said the preliminary proposal for the development of the eight-lane Dhaka-Chattogram highway has been returned as the cost estimate of the project is based on a previous survey undertaken some years ago. As a result, the commission has asked that the proposal based on the latest survey data and with more details be sent to it.

Meanwhile, within the next one month, the work of appointing consultants for Dhaka-Chattogram eight lane project will be completed. The consulting firm will complete the design within 18 months. Chief Engineer of the Roads and Highways Department Md Ishaque said the aim is to complete the approval of the main project proposal and finalise funding before that.

According to Planning Commission sources, last January the Road Transport and Highways Department divided the 229 km Dhaka-Chattogram National Highway into three parts, created three separate PDPPs and sent them to the Planning Commission – 38 km in Dhaka, Narayanganj and Munshiganj section, 125 km in Cumilla-Feni section and 69 km in Chattogram section.

Some parts of the 229 km road will be turned into four lanes and elsewhere into six lanes. The total expenditure has been estimated at Tk73,150 crore.

Roads and Highways Department officials said that the project proposals have been prepared in three separate parts for the implementation of the project by involving multiple development partners.

Chief Engineer of Roads and Highways Md Ishaque told TBS that Japan is providing loans for the construction of bypasses and flyovers at five places on the Chattogram-Cox's Bazar highway with the financing of Jica.

Japan has also expressed interest in financing the development of this highway into four lanes, he said.

He added that the Asian Development Bank (ADB) will finance the development of the eight-lane Dhaka-Chittagong highway.

The World Bank and the Asian Infrastructure Investment Bank (AIIB) can also be good alternatives if the current loan deal talks do not go through, said the official.

"There will be no problem in getting financing for the development of these two highways. Now the main goal is to complete the preparatory work quickly," said Md Ishaque.


The Ministry of Shipping and Red Sea Gateway Terminal (RSGT) signed a framework of mutual cooperation for Patenga Container Terminal (PCT) on the sidelines of the Bangladesh Business Summit on Saturday (11 March).

During the signing, the Prime Minister's Private Industry and Investment Adviser Salman F Rahman MP and Saudi Arabia's Commerce Minister Majid Bin Abdullah Alkassabi were present, said a media release.

A concession agreement means that RSGT has been granted the rights to operate and manage the PCT for a certain period of time, likely through a formal bidding process. The framework agreement would outline the terms and conditions of the concession, such as the duration of the agreement, the obligations of both parties, and the fees or revenue-sharing arrangements.

"This is a very auspicious occasion for Red Sea Gateway Terminal as another milestone is completed in the process of concluding this partnership. We are honored to be able to serve the Bangladeshi Ministry of Shipping, the Chittagong Port Authority and the people of the great nation of Bangladesh in expanding their role in international commerce, and their presence in the Global Logistics Chain," said RSGT Executive Chairman Aamer Alireza while signing the agreement on behalf of his organisation.

"I am pleased to have been a witness to the signing of this framework related to a Saudi investment in one of Bangladesh's most important infrastructure projects, a testimony to the ever-expanding economic relationship between the two brotherly nations," Salman F Rahman said.

He expressed satisfaction at the progress of the transaction process and added, "As agreed in the framework, both sides are committed to the execution of a concession agreement within mid2023".

In July 2022, RSGT, operator of the largest and busiest terminal facility in Saudi Arabia, was selected by the Ministry of Shipping as the preferred operator for the new $240 million, 500,000 TEU capacity PCT facility at Chattogram.

Chattogram Port is the busiest container port on the Bay of Bengal, with a 2021 container throughput of 3.2 million TEU. The new terminal facility was constructed by the Bangladeshi government and offers 600 metres of quay, and a depth of 9.5 metres.

PCT will enhance Chattogram's operational efficiency with the ability to handle three vessels simultaneously.

Chattogram port ranked 64th globally in total container traffic in 2021 and handles 90% of Bangladesh's import and export ocean cargo.

Bangladeshi cargoes are generally transshipped to Colombo, Sri Lanka, and Singapore. The majority of import shipments are destined for Dhaka, a distance of 265 km (165 miles) distance from Chattogram's maritime centre.

The port also serves as the main gateway for Bangladesh's fast-growing exports including its garments trade, one of the world's largest.

RSGT, located at Jeddah Islamic Port, handled approximately three million TEU in 2022, and has an annual throughput capacity of 6.2 million TEU.

 

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The last cubic meter of concrete was poured on the secondary containment dome of Ruppur NPP unit 1 in Bangladesh
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Some days later, the SPOT-deflector was put on the top of it - the "crown" of the unit. The SPOT-defector is part of the passive heat removal system of the plant. In case of a full station blackout, the reactor will be cooled indefinitely by the system and prevents a meltdown. The system works according to natural laws.

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The government plans to set up two more on-grid solar power plants in Chattogram's Rangunia and Dinajpur's Fulbari as part of its efforts to achieve the target of generating 10% of electricity from renewables by 2025.

The plants are expected to add 70 megawatts of electricity to the national grid. The country's current power generation capacity is 22,608MW with 1.5% or 359MW (on-grid) coming from 9 solar plants.

The Bangladesh Power Development Board made the decision on setting up the two solar plants at its board meeting in the second week of February and floated two separate tenders immediately. Interested candidates have been asked to respond to the tender invitations by 2 April.

"Tenders have been invited even before the finalisation of detailed project plans so that the construction of the plants can be completed fast," Ahmed Zahir Khan, director at the Directorate of Renewable Energy and Research and Development under the board, told The Business Standard.

"Hopefully, we will be able to finalise the project plans, including estimated costs, within a month and commence the projects by June this year," he added.

The Rangunia plant will be 50MW in capacity on some 149 acres of land owned by the power board, officials said. It will generate 2 lakh units of electricity every day, while the other plant – 20MW in capacity – will be built on 60 acres of land at Barapukuria Coal-Fired Thermal Power Plant Complex at Fulbari to generate 80,000 units of electricity every day.

Earlier in 2020, the Dubai-based Consortium of Metito Utilities Limited expressed its interest in setting up a 55MW solar power plant on the same land at Rangunia, but it backtracked considering the high project costs. Regarding the Fulbari plant, the government began preparations in August last year but the initiative moved slowly owing to the dollar crisis.

The authorities are planning to install solar panels and inverters, which can last 20 years, at both plants. "The average cost of setting up a solar plant is usually Tk8 crore per megawatt. With this calculation, the estimated cost of the Rangunia project will be more than Tk400 crore and that of Fulbari Tk160 crore. Other expenses, including land development, construction of roads, buildings and necessary infrastructure will also be added," a senior power board official, wishing to remain unnamed, told TBS.

Rush for generating 10% of electricity by 2025

The government is moving for the new plants given its determination to achieve its target of generating 10% of electricity from renewables, including solar, hydropower and wind, by 2025.

Currently, the country has a capacity of generating 2% of electricity from renewables, according to the Bangladesh Power Development Board. At least 12% of electricity is needed from renewable sources to attain Sustainable Development Goals or SDGs.

Earlier, the government had set targets of producing at least 5% of the total electricity from renewable sources by 2015 and 10% by 2020, but none of them could be achieved yet, according to the Ministry of Power, Energy and Mineral Resources.

"Bangladesh can generate 20,000MW of green electricity within 2041 by expanding solar power generation facilities," says the "National Solar Energy Roadmap 2021-41" prepared by the Sustainable and Renewable Energy Development Authority. Even solar power capacity can be taken to 30,000MW with a proper utilisation of riverside and abandoned lands, it estimated.

Prime Minister Sheikh Hasina has repeatedly been instructing the authorities concerned to utilise the unused land of the country's existing power plants and the PDB for the development of renewable energy amid a scarcity of land.

In addition to the tenders for the two plants, the Power Development Board has also invited a separate tender for the construction of the 7.6MW solar power plant at the Karnaphuli Hydro Power Plant in Rangamati.

"The government has decided to build solar power plants in different parts of the country [as part of its efforts to achieve a generation of 10% of electricity from renewables]," Planning Commission Member Mohammad Emdad Ullah Mian told TBS. "Several places were visited late last year for this purpose," he added.

Solar power cheaper than some others

The production cost for a unit of electricity is Tk22 on average at diesel-run power plants, Tk10 at LNG-run plants, Tk4-6 at coal-fired plants and Tk12 at furnace oil-run plants, according to the Bangladesh Power Development Board, while the cost is Tk0.3-1 at Kaptai hydropower plant.

"Overall, solar power production costs remain near Tk10 per unit," Ahmed Zahir Khan said.

"The production cost per unit of the 7.4MW solar power plant in Chattogram was about Tk14 in 2019, which is set to fall to Tk8 only thanks to the new higher capacity panels and inverters," an engineer at the Karnaphuli Hydropower Station said.

  • They want Bus Rapid Transit or dedicated lane for buses
  • Oppose metro rail citing cost amid global volatility
  • Foreign currency crisis is nother reason they cite against metro

The Forum for Planned Chattogram (FPC), a voluntary citizens' group for ensuring a better urban living environment in the port city, opposed the construction of a metro rail in Chattogram city, citing various reasons, including cost and duration of the project at a time when Bangladesh is hit by the ongoing global volatility and deepening foreign currency crisis.

Instead of a metro rail, a Bus Rapid Transit (BRT) or dedicated lane for public buses could be constructed in Chattogram city for quality service, said FPC Vice President, transport expert Engr Subhash Barua, while reading out a written statement at a press briefing at the S Rahman Hall of the Chattogram Press Club on Sunday.

Engr Subhash cited a survey on metro rails in various countries, conducted by the GTZ (German Agency for Technical Cooperation) in 2003, which said that BRT can provide the same quality of service as metro rail at a fraction of the cost of metro rail.

"The construction, operation and maintenance cost of BRT is much less than metro rail," he said.

He cited another survey conducted by the Institute for Transportation and Development Policy (ITDP) for Indonesia which stated that a 426-kilometre BRT corridor can be built at a cost of $1 billion. A 40-kilometre Light Rail Transit (LRT), a 14-kilometre elevated metro rail or a 7-kilometre metro rail share the same construction cost, according to the report.

A metro rail takes 2-3 years for the feasibility study and a total of 10 years for completion, which is too long, said the FPC vice president.

The Chattogram Master Plan (1995), Detailed Area Plan (2008) and Strategic Master Plan (2018) had recommendations about traffic management, vehicle management (TDM), dedicated lanes for public buses, footpath management, junction design renovation and management, ensuring 100% utilisation of existing roads and ensuring enforcement of traffic laws, he added.

Citing the differences between Dhaka and Chattogram, Engr Subhash said that 21 million passenger trips are made in the capital city every day whereas the toll stands at 6.7 million per day in Chattogram city, which may increase to 10.4 million trips in 2030.

According to the Chattogram Strategic Urban Transport Masterplan (2018), Chattogram's CDA Avenue Road will see a peak ridership of 9,500 to 17,000 commuters during peak hours from 2017 to 2030.

FPC claimed that there was a mistake in the plan of BRT in Dhaka, which caused many complications. On the other hand, a corridor has already been fixed for the BRT in Chattogram.

"Mobility solutions for cities and ports are multidimensional in nature. It is not possible to solve the problems of Chattogram city only by simplifying it, since it is a port city," said the FPC vice president.

FPC President Prof Muhammad Sikander Khan, Adviser Prof Shafiq Haider Chowdhury, Vice President Engr ABMA Baset, architects Ahmed Jinnur and Bidhan Barua, Joint Secretary General Taslima Muna and members Prof Dr Nazim Uddin and Tanvir Pial were present at the briefing.

 

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The New Development Bank (NDB), formerly known as the BRICS Development Bank, is keen to invest in Bangladesh's public and private sectors that have been growing impressively for years, its Director General for the Indian regional office D J Pandian said in an interview with The Business Standard in Dhaka recently.

"We have already started working on a big project to improve water supply systems in Dhaka. We are planning to lend $235 million for this project," he added.

Although the multilateral development bank established by the Brics countries – Brazil, Russia, India, China, and South Africa – has been in operation for seven years, it is entering Bangladesh with the project.

The Bangladesh government is in discussions with the NDB for projects in the renewable energy and infrastructure development sectors. "The New Development Bank is happy to look into the opportunities. We want to lend Bangladesh at least $1 billion a year," the director general said, noting that the country will need long-term financing on a regular basis to develop infrastructure and so on.

Prior to joining the NDB, Pandian served the Asian Infrastructure Investment Bank as the vice president and chief investment officer and the Indian government as a bureaucrat.

He said the NDB is also interested in working closely with Bangladesh's private sectors in two ways. One is providing loans and directly engaging in important private-sector projects. "If a project and its promoters are good, and risks are reasonable, we can definitely step in. We can also provide equity through private equity funds."

The second way the NDB can provide assistance to the private sector is by extending a line of credit to existing banks in Bangladesh. "They [local banks] will assess the risk, and together we can provide loans."

On the challenges, the senior NDB official said, "As we are just entering Bangladesh for the first time this year, it is crucial to understand the economy, the people, and the business climate. We need to recruit appropriate manpower from Bangladesh, which can enlarge our knowledge base and better serve the country"

Another challenge the development partner may face is policy constraints. "If the government policies are good, our journey will be easier," said Pandian.

On priority sectors, he says the NDB does not have any specific priority, but the Bank can provide finance to all infrastructure sectors, including road, bridge, port, railways, and water supply development. "However, it is crucial that these projects are climate resilient, since Bangladesh is vulnerable to the effects of climate change."

The country also has two important borders – one with India and the other with Myanmar. "The NDB can support developing connectivity to India, but we cannot do that for improving connectivity to Myanmar as it is not our member country."

"The scope for connectivity, however, is not limited to roads. It also includes digital connectivity, electricity transmission and others. If any private sector or government comes forward with projects related to digital connectivity, electricity connectivity, or road connectivity, the NDB can definitely look into them."

Regarding the Bangladesh economy, he is pleased to see that it is continuously growing. "Many see it as an economy of miracles. Despite the slowdown in other parts of the world, Bangladesh is still growing. The 7% growth is a result of the efforts and proper policies of the government."

"We must congratulate the government of Bangladesh for their forward-looking and growth-oriented policies that are inclusive," he said and added that the recent Bangladesh Business Summit was a great initiative. "The summit brought together people from different parts of the world. Continuing such events can attract much more foreign investments to Bangladesh in the days to come."

Bangladesh moves slowly to avail NDB loans

The multilateral bank has a target of disbursing $30 billion in five years, starting from 2022. Bangladesh became its member in 2021 but has been in a slow move to avail these loans due to laxity in preparing project proposals, several government officials familiar with the matter told The Business Standard.

The officials wished to remain unnamed as they are not authorised to talk to the media.

The country has so far submitted only a preliminary proposal for a water supply project worth $235 million in Dhaka, they said, and noted that discussions, however, are taking place with the NDB to secure loans for an additional five projects, totalling $1.28 billion.

According to a bridge department official, preliminary discussions have already been held with the lender regarding the construction of the Payra Bridge and the Bishkhali Bridge, for which a loan of $978 million has been requested.

Other proposed projects include a water supply project in Rajshahi for $83 million, a 120MW solar power plant at Raipura for $115 million, and power distribution in the Northern Electricity Supply Company (NESCO) area for $112 million.

Bangladesh is at risk of missing out on funds ranging from $3 billion to $5 billion available from the bank as delays in submitting preliminary proposals will reduce the country's chance of availing the loans in the next five years, according to an official of the Economic Relations Division.

Experts have identified a lack of capacity to formulate bankable development projects as a major obstacle. Ministries and divisions are not interested in development schemes financed by the NDB since the bank does not assist in preparing proposals and reports, unlike the World Bank or the Asian Development Bank.

The government is yet to finalise the draft law for the NDB financing, which will enable Brics bank-funded projects to avail some tax waivers. The draft is now awaiting Cabinet Division approval. The New Development Bank can be a new large funding source for Bangladesh alongside the World Bank, Asian Development Bank, and Asian Infrastructure Investment Bank, if proper measures are taken, experts believe.

In the 2017-21 period, the bank approved over $29 billion in loans to 74 projects in Russia, India, China, and South Africa. The bank will disburse another $30 billion in the 2022-2026 period, according to its new five-year lending strategy.

The NDB offers loans with floating interest rates ranging from the Secured Overnight Financing Rate (SOFR)+1.30% to SOFR+1.65%, with a front-end fee of 0.25% and a commitment fee of 0.65%. In contrast, the Asian Infrastructure Investment Bank offers loans at SOFR+0.79% to SOFR+1.29%, with a front-end fee of 0.25% and a commitment fee of 0.65%.

 

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Construction works continue on the 232.94-metre eight-lane Aminbazar Bridge over the Turag River to ease traffic movement between the capital and northern districts.

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The construction of the railway track on the Padma Bridge was completed on Wednesday with the installation of the final sleeper and the casting of the last seven-metre section of the track.

A trial run of a train on the 6.68 km rail line on the bridge is scheduled for 4 April.

Confirming the news, Brigadier Saeed Ahmed, project manager-1 of the Padma Bridge Rail Link Project, said, "The concrete part of the last seven-metre section will take 48-72 hours to be ready for train movement."

Officials said constructing the stone-free rail track on the bridge and keeping it open for vehicle movement was considered a major challenge.

Afzal Hossain, project director of the Padma Bridge Rail Link Project, said, "After finalising the design, construction on the main bridge for the railway began in November last year. The work has been completed within four months. Currently, we have made 74% progress on the Dhaka to Mawa section, 92% progress on the Mawa to Bhanga section, and 68% progress on the Bhanga to Jashore section. Overall, our progress is approximately 75%."

"We are hopeful that, barring any natural calamities, we will be able to complete the entire project by June 2024," he added.

According to the engineers, the Padma Rail Bridge has a total length of 6.68 km, which includes the 6.15 km main bridge and the viaducts on both sides. A total of 11,140 sleepers have been installed on the main bridge. Except for the eight steel sleepers of the movement joints, all the sleepers are made of concrete.

Apart from the Padma Bridge, so far, 32 railway culverts, 37 underpasses and 13 railway bridges have been completed on the 169 km level crossing-free railway track.

Free of level-crossings, the much-awaited rail project is set to significantly reduce travelling hours from the capital Dhaka to India's Kolkata through Jessore to just over three hours and to Khulna to four hours.

 

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Bangladesh has achieved another milestone in renewable energy sector as a private firm has completed construction of the country's largest solar power plant, with a capacity of 200MW, in Sundarganj Upazila of Gaibandha.

The power project has been implemented at the cost of around Tk1,800 crore on a land of around 700 acres in the char areas of Khodda and Lathshala at Tarapur Union.

Located near the Teesta River, it has already become a tourist attraction in the area.

State Minister Nasrul Hamid shared some photos of the plant that has 520,000 solar panels on Twitter on Thursday night.

The plant is expected to start commercial production at the soonest, project officials said.

Teesta Solar Limited started building this plant in 2018. Beximco owns 80% share of the plant while the rest by a Chinese company.

On November 30 last year, the plant started supplying 90-140MW of electricity on a trial basis to the Rangpur grid substation through a newly-built 34km transmission line.

According to the power purchase agreement signed on October 26, 2017, the government will buy electricity at a rate of Tk13.9 per unit for 20 years.

Solar share growing​


Currently, the largest solar plant in Mongla produces over 100MW. With seven other small units operating at different parts of the country, Bangladesh's solar industry supplies over 230MW to the national grid every day.

The solar share is expected to grow fast over the next few years – thanks to the government's prompt steps to shift toward clean energy in phases.

The 3.28MW plant at Sarishabari in Jamalpur is the country's first grid-tied solar power facility that came into commercial operation in 2017.

The other key players operating solar parks are the consortiums of HETAT-DITROLIC and IFDC Solar (50MW in Mymensingh), Spectra Engineers Limited and Shunfeng Investment Limited (35MW in Manikganj); Joules Power Limited (20MW in Cox's Bazar), and Parasol Energy Ltd (8MW in Panchagarh).

Mega projects underway​

Bangladesh is implementing and considering over a dozen massive solar power plants, including three with a capacity of 1,000MW each, to join the gigawatt club of China, India and the UAE.

One of the three is being set up at Swarna Dwip (formerly Jahazzair Char) in Noakhali. In February last year, the US-based Pacific Energy Group, LLC (Pacific Energy), through its subsidiary Eleris Energy Limited, Hong Kong, signed a Joint Venture Agreement (JVA) with the Bangladesh Army Welfare Trust, on building the plant.

Bangladesh Army's 33rd Infantry Division has been in charge of the 370sq-km island since 2013 and has been implementing different development projects alongside setting up a base for exercises.

The other major projects currently being reviewed by the government or being implemented are located at Sreemangal of Moulvibazar (300MW), and at Mongla in Bagerhat and Thakurgaon (200MW each), Energy Ministry sources told Dhaka Tribune.

Since 1996, Bangladesh has installed over six million Solar Home System (SHS) units, and thousands of rooftop units, street lights and solar-powered telecom BTS, and solar irrigation units.

Moreover, many private firms have installed small non-grid solar power plants in their industries, contributing to the promotion of clean energy.


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The government plans to construct two roads to connect Madani Avenue in Baridhara with the Purbachal Expressway next to the Bashundhara Residential Area in order to ease the traffic pressure in the capital's northern parts.

These roads will establish connectivity from Purbachal to Gulshan 2 and Rampura Road via Beraid and Natun Bazar, bypassing Kuril Bishwa Road, according to a development project proposal seen by The Business Standard.

One of the proposed roads, stretching 3.3km, will be constructed from Purbachal New Town to Madani Avenue via Yusufganj, while the other, about 5.23km in length, will go through Poshi, Kearia and Jolshiri housing projects.

The Local Government Division has proposed the project at a cost of Tk272 crore for the 8.5km roads, including four bridges and two culverts. The Local Government Engineering Department (LGED) aims to complete the work by 2025.

But the Planning Commission, in a project evaluation meeting last month, raised objections to overestimated costs in several sectors of the project.

According to sources present in the meeting, presided over by Mohammad Emdad Ullah Mian, a member of the Physical Infrastructure Division of the commission, an allocation of Tk119.84 crore has been sought by the LGED for the development of 8.53km of roads, with Tk14.05 crore estimated expense per kilometre.

However, the LGED has another project for widening and strengthening roads at Dhaka Division upazilas and unions where the estimated cost for 1km road is Tk1.45 crore.

The LGED has also asked for Tk144.50 crore for the construction of the bridges (totalling 289 metres) at a cost of Tk50 lakh per metre. But Tk11-16 lakh per metre is being spent on bridges under similar projects of the organisation.

Planning Commission officials said a decision has been taken at the meeting to recommend approval of the project on the condition of cost reduction.

According to the project proposal, although many housing projects and industrial factories have been built in Rupganj of Narayanganj, the number of connecting roads in this area is very few. Once built, these link roads will boost the economy of Purbachal, especially Rupganj. Besides, the roads will serve as alternative traffic diversion routes between Purbachal Expressway and Madani Avenue.

The project aims to widen the roads by 100 feet, which will generate economic benefits to the tune of Tk138 crore annually through increased vehicle speed, time and fuel savings, according to the feasibility study report on the project.

The report said these two corridors carry an average of 2,241 vehicles per day, consuming 9,438 litres of fuel. Widening the road will save 2,831 litres of fuel per day.

On the other hand, an average of 4,956 passengers use these roads on a daily basis for three hours. Halving the journey time will save passengers 7,434 working hours a day. As such, the economic value of the time saved in a year equals Tk16 crore.

The Planning Commission has also objected to the proposal of appointing two consultants for 24 months at a cost of Tk1.20 crore.

At the evaluation meeting, it said the work is part of the LGED's regular activities. As such, the commission wants to know the reason for appointing additional consultants.

The commission also wants to know the reason for purchasing an SUV for Tk94 lakh under the project, as well as Tk10 lakh for travel expenses and Tk12 lakh for vehicle rental. The commission has also objected to the LGED's claim of about Tk2 crore for physical contingency and price contingency.

What stakeholders say

GM Muzibur Rahman, project director of the Rupganj Jolshiri Abashon Connecting Road Development Project, is working as an LGED coordinator for the project.

He told TBS, "The LGED constructs bridges of 18 to 24 feet in width under similar projects. But in the proposed project, the width of the bridge will be 100 feet."

More bitumen will be needed for these link roads. Besides, dividers, road lights and drains will be constructed on both sides of the four-lane roads. That is why the cost will be higher than the cost of other projects, he said.

"There has been a positive response from the Planning Commission regarding the approval of the project. The proposal has been sent back to the Finance Division for the approval of recruitment through outsourcing," Muzibur Rahman added.

A high-up at the Physical Infrastructure Division of the Planning Commission, said, "At the PEC meeting, the issue of unreasonable expenditure proposals in various sectors was highlighted by the commission. The Local Government Division and the LGED responded to some questions raised by the commission."

Dr Shamsul Haque, a transportation expert and professor of the civil engineering department at Buet, told TBS that the road infrastructure from east to west of the capital is much less than the requirement. As such, the matter of establishing the connection of two roads is very important. However, before taking up such a project, the cost must be re-evaluated.

"Most of the cost of road projects in Bangladesh goes into land acquisition. But there is no land acquisition in the proposed project and the issue of the huge expenditure needs to be reconsidered," the Buet professor added.

 

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The Bangladesh government and the World Bank have penned a $2.25 billion worth loan agreement, comprising five projects to develop various sectors, including regional trade and connectivity, disaster preparedness and environmental management.

Of the five projects, funds for the $500 million First Bangladesh Green and Climate Resilient Development project, which comes as budget support, will be released by the end of this month, according to sources at the Economic Relations Division (ERD).

For the remaining projects, officials expect at least 20% of the funds to be disbursed within the next year.

Sharifa Khan, secretary of the ERD, and Abdoulaye Seck, World Bank country director in Bangladesh, signed the financing agreements on behalf of their respective sides on Tuesday, said a press release issued by the Ministry of Finance.

Prime Minister Sheikh Hasina and World Bank President David Malpass were present during the exchanges of the financing agreement.

The projects in a nutshell

  • $753.45m for transport, trade connectivity in Eastern South Asia
The objective of the umbrella project – Accelerating transport and trade connectivity in Eastern South Asia (ACCESS) Bangladesh Phase-1 Project – is to develop efficient and resilient regional trade and transport in Bangladesh.

The National Board of Revenue (NBR), the Roads and Highways Department (RHD) and the Bangladesh Land Port Authority will implement the project between July 2022 and June 2028.
  • $500m for resilient infrastructure
The project aims at reducing the vulnerability of the population across the cyclone and flood prone coastal districts of Bangladesh. Another objective is to provide safe shelter to human beings and their resources including livestock during natural calamities like cyclones, tidal surges and floods.

The Local Government Engineering Department will implement the project in 6 years (01 July 2022- 30 June 2028).
  • $500m for climate resilient development
The main objective of this budget support programme is to support the Bangladesh government for transitioning to green and climate resilient development by enhancing public planning, financing, and delivery of green and climate resilient interventions; and promoting key sector reforms for greener and more efficient production and services.

The Finance Division is the main implementing agency for this programme. The budget support will be released by 30 June 2024 subject to compliance of certain prior conditions.
  • $250m for microenterprise transformation
The project looks to increase resource-efficient and resilient green growth of microenterprises in Bangladesh. It will also promote and transform the microenterprise sector into a more dynamic, lower polluting, resource-efficient, and climate resilient sector. It will be implemented by the Palli Karma-Sahayak Foundation during the period 2023 to 2028.
  • $250m for environmental sustainability
The objective of this project is to strengthen the capacity of the Government of Bangladesh in environmental management and to reduce pollution discharges.

The Department of Environment, the Bangladesh Road Transport Authority, the Bangladesh Bank, and the Bangladesh Hi-tech Park Authority will implement the project in five years (July 2023 to June 2028).

Terms and conditions

Bangladesh is getting four loans out of five from the World Bank's International Development Association (IDA). Only the First Bangladesh Green and Climate Resilient Development project has two types of credit – regular IDA ($176 million) and short-term maturity loan ($324 million). The regular IDA loan is to be repaid in 30 years with a grace period of five years.

A service charge of 0.75% per annum and interest at the rate of 1.25% shall be paid on the withdrawn amount of this loan.

Besides, a maximum annual commitment fee of 0.50% is payable on the unwithdrawn financing balance. It should be noted that the commitment fee has been waived by the World Bank for Bangladesh for a long time including the current financial year.

On the other hand, the short-term maturity loan has to be repaid in 12 years with a grace period of six years.

No service charge and interest will be applicable on the withdrawn amount of this loan.

Since 1972, the World Bank has been one of the main development partners of Bangladesh.

The World Bank has committed a total of $40.4 billion in loan assistance and $722 million in grants for Bangladesh under 368 projects/programmes till now.


Bangladesh has signed a readiness certificate for the first unit of the Rooppur Nuclear Power Plant, allowing it to procure fuel.

The certification was signed by Rooppur Nuclear Power Plant's Project Director Dr Md Shaukat Akbar and Atomstroy Export's Vice President AV Diary in Novosibirsk city, Siberia, on behalf of Bangladesh and the Russian Federation respectively.

The protocol was signed at the office of TVELTVEL, a subsidiary of Russian stage agency Rosatom, on Friday.

The signing of the certificate ensures that Bangladesh can have fuel for the plant in accordance with international regulations, IAEA guidelines, and regulatory requirements.

Under the general contract signed in 2015, the Russian Federation will provide Bangladesh with energy security for 36 months, as stipulated in the contract, said the project director.

Additionally, Bangladesh will not have to make any separate payments for fuel for the first three years of commercial production, he added.

The historic protocol signing ceremony was attended by Bangladesh's Ambassador to Russia, Kamrul Ahsan, and Rooppur power plant's Deputy Director, Dr Jahedul Hasan, among others.

 

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Bapex believes it has discovered a gas field at Ilisha union in Bhola.

"We found gas in the first layer, a depth of 3.44km. Now we are checking whether there is gas in the upper two layers," said Mohammad Ali, managing director of Bangladesh Petroleum Exploration and Production Company Limited (Bapex).

If everything goes as expected, Bapex will formally announce the new discovery of a gas field, possibly by the middle of this month, he told The Daily Star.

The first drilling stem test, a method of determining extractable reserve, reveals that the pressure in the deepest layer is around 3,500 PSI and the gas flow is over 14 million cubic feet a day, he said, adding that producing gas from the field would be commercially viable.

Bapex estimates that 180-200 billion cubic feet of gas would be found in the new field. The company has been extracting gas as an experiment from the exploratory well, Ilisha-1, since April 28, and the second drill stem test, down to 3.2km depth, will start this week, officials said.

The last gas field discovered in Bangladesh was at Zakiganj, Sylhet, in June 2021.

The current known gas reserve in Bangladesh is almost 10 trillion cubic feet of gas. The country currently consumes around 1 TCF of gas a year.

The reserve they found in Ilisha is not part of the two previously discovered gas fields, Shahbazpur and Bhola North, said the Bapex chief.

That Bhola North is a separate gas field is debated because many renowned geologists believe that it is a part of the Shahbazpur field, which is only about 3km away.

Bapex chief Mohammad Ali says Ilisha is at least 35km away from Shahbazpur, and its reserve is separated by a seismogenic fault from the two other gas fields.

Nasrul Hamid, state minister for power, energy and mineral resources, recently wrote on Facebook that the authorities were about to find a new gas field.

The development comes at a time when the government is spending foreign currency to import expensive LNG to meet the growing energy demands.

Renowned energy expert Prof Badrul Imam said, "The exploration is significant. Several years ago, some influential individuals in the government started saying there was no gas in our country and our reserves were running out.

"They stopped exploration and started importing LNG from the international spot market. Geologists, like myself, have always said that these were false claims. We have large volumes of gas onshore and offshore because our country is the biggest delta in the world.

"We need more and more exploration so that we can save millions of dollars by reducing LNG purchases."

In 2022, Bapex took a two-year initiative to drill at least 46 wells. In Bhola, it drilled three wells and found gas in all of them.

Maqbul E Elahi Chowdhury, a former director at Petrobangla, said, "The gas field [Ilisha] may produce around 30 million cubic feet a day. However, the country needs 3,000 million cubic feet a day."

Since Bhola is an island, supplying gas from there to the national grid remains a major challenge, he said.

"We need a feasibility study by a competent third party to see whether investing in a pipeline from Bhola would be worthwhile."

Prof Anwar Hossain Bhuiyan of Dhaka University said although gas has been found in the Shahbazpur and Bhola North fields, and the Ilisha-1 well, the latter is an isolated field.

Between 2.5 and 5 million years ago, river sediments separated Ilisha from the Bhola North field. Gas has been found in Ilisha well at a layer deeper than that of Shahbazpur and Bhola North fields, he told The Daily Star.

The Togbi-1 well, which was drilled to explore gas, was later proved to be part of the Shahbazpur field, he said.

"This time, the picture is different." It has been confirmed by 3D seismic data that a channel filled with rocks predominantly made up of silt and clay separated the Ilisha field from Bhola north from west and northeast, he added.

"We have to pay millions of dollars to import liquified natural gas from abroad. If you consider the current situation, this discovery is big news."


The state-run Gas Transmission Company Limited has proposed the installation of a 65-kilometre pipeline at an estimated cost of Tk1,300 crore to bring natural gas from Bhola island to Barishal as well as the mainland of the country, officials said.

The proposed line of a 30-inch diameter will transmit gas from Shahbazpur Gas Field and Bhola North Gas Field to Barishal's Laharhat. It will later be connected to the national grid through the proposed Kuakata-Barishal-Gopalganj-Khulna gas line.

"The government wants to utilise Bhola gas for the country's development, which is why an initiative has been taken to bring the gas to Barishal [mainland] with the installation of the transmission line," Rukhsana Nazma Eshaque, managing director of Gas Transmission Company, told The Business Standard.

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"We have just prepared a primary development project proposal and forwarded it to the Planning Commission for its approval. The rest will depend on the availability of funds," she said, noting that it has been proposed that the project commence this year and continue until 2026.

According to the primary proposal, the transmission line installation will cost $123.81 million, equivalent to Tk1,300 crore, with $53.55 million or 43% borrowed from development partners.

Officials said the Economic Relations Division will be requested to look for funds for the project if the Planning Commission gives it a nod.

Meanwhile, Abu Sayed Mahmud, general manager (planning) of Gas Transmission Company, told TBS that no feasibility study has been conducted so far regarding the project. "The Gas Transmission Company is thinking about a study before the project implementation. The government, however, will make the final decision."

Officials also said the primary proposal has been prepared before the feasibility study, following instructions from government high-ups. Earlier, the government thought of bringing Bhola gas to the national grid by conversion into CNG, but it did not happen.

"The previous proposal of converting the gas into CNG for the convenience of transportation to the national grid was not feasible. Using pipelines is rational in this case," believes M Tamim, professor of petroleum and mineral resources engineering at the Bangladesh University of Engineering and Technology.

"Barishal has no national grid connection so far, yet if the Bhola gas is transported to Barishal it can be used widely," he told TBS.

According to the Bangladesh Petroleum Exploration and Production Company (Bapex), the recoverable gas reserve at the Shahbazpur Gas Field is 639.12 billion cubic feet and some 124.5 billion cubic feet were recovered until July last year. The field still has a reserve of some 515 billion cubic feet.

The amount of recoverable gas at the Bhola North Gas Field is currently 435.32 billion cubic feet, according to Bapex data. Currently, the production capacity of both gas fields is 140 million standard cubic feet per day, of which 66 million standard cubic feet per day is being supplied to Bhola localities.

"The production capacity is projected to be 203 mmcfd in FY28. Therefore, to evacuate the additional amount of gas from indigenous gas fields in Bhola and supply it to the south-western region of the country, the proposed pipeline can be built," reads the primary proposal, a copy of which TBS obtained.

"The project will eventually help establish gas-based power plants, industrial and commercial units, facilitate employment generation and boost the economic growth of the region," it notes.

Officials also said drilling works are being carried out at Togbi-1, Bhola North-2 and Hisha-1 gas wells. Upon successful completion of the works, the amount of recoverable gas reserves may increase. Hence, the pipeline project can be utilised further.


South Korean company M/s Smile Arts Co, Ltd. is going to set up a Jewelry manufacturing industry in Uttara Export Processing Zone (Uttara EPZ).

Bangladesh Export Processing Zones Authority (BEPZA) signed an agreement with the company to this effect at BEPZA Complex on Tuesday (9 May), said a press release.

Ali Reza Mazid, Member (Investment Promotion) of BEPZA and Shin Hyoung Ki, the managing director of Smile Arts Co Ltd. signed the agreement on behalf of their respective organisations.

BEPZA Executive Chairman Major General Abul Kalam Mohammad Ziaur Rahman, ndc, psc was present during the signing ceremony.

The company will invest $2 million to produce annually 40 million units of Costume Jewelry, Sterling Silver Jewelry and Gemstone Jewelry where 300 Bangladeshi nationals will get employment opportunities.

Among others, member (Finance) Nafisa Banu, executive director (Administration) Md Zakir Hossain Chowdhury, executive director (Public Relations) Nazma Binte Alamgir and Additional Executive Director Md Fazlul Haque Mazumder were present during the signing ceremony.


A ship carrying Bangladeshi exports has left Chattogram port for its final destination of Dubai's Jebel Ali port, marking the debut journey on the route.

The container ship HONG AN, the first under a service launched by the France-based shipping company CMA-CGM, left for its first transhipment port in Sri Lanka's Colombo on 7 May.

After reaching Colombo port on 11 May and unloading some cargo, the ship will then proceed to Jebel Ali port via Mundra port in India.

On its journey, the ship took 895 TEUs of export cargo. Of this, 751 TEUs are for Colombo port, 23 TEUs for India's Mundra port and 121 TEUs for Jebel Ali port, according to Chittagong port terminal operator Saif Powertech.

The vessel had brought 1,126 TEUs (twenty-foot equivalent unit) containers to Chattogram port.

As a result of the new service, export of goods from Chattogram to Dubai will take only 15 days.

On the return journey, traders will be able to bring goods to Chattogram port in 10 days, significantly reducing transport time.

Mostly vegetables and fish products are exported to the Middle East, while raw materials for the garment sector are imported from the region, traders said.

It used to take 30-35 days to ship goods from Jebel Ali port to Chattogram port via transhipment ports in Singapore, Sri Lanka, and Malaysia. And if the transhipment port was jammed, it took more time, they said.

The new service will save them 10-15 days and will reduce suffering, they added.

Bangladesh-India Gulf Express

The CMA CGM Group named the shipping service "Bangladesh India Gulf Express (BIGEX)".

Characterised by fast transit times, exports from Chattogram will reach Jebel Ali and Abu Dhabi in just 14 and 15 days respectively.

In addition to a more efficient and greener alternative to trucking, BIGEX will get Bangladesh shipments to India's Nhava Sheva and Mundra ports in eight and 10 days respectively.

The new service is set to diversify Chattogram's connectivity to transhipment hubs beyond the key Asian ports to the Gulf and India's West Coast ports, said a CMA-CGM source.

Direct routes from Chattogram to ports in Italy, England, Rotterdam, Denmark and Portugal have been launched recently, greatly benefiting exporters and importers.

Chattogram Port Authority Secretary Md Omar Faruq said that talks are going on about starting direct transportation of goods to some other countries.

He said if a shipping company wants to transport goods directly, the port authority will provide the necessary assistance.

 

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Maersk is building a 210,000 square feet warehouse in Chattogram to expand its capacity, the Danish logistics giant said.

The warehouse has been tailor-made to suit the needs of the exporters of retail and lifestyle commodities and should be available by April 2024, according to a press release issued today.

In recent times, Bangladesh has seen a slight slowdown in exports owing to the ongoing geopolitical situation that has led to reduced demand for retail and lifestyle goods in the Western markets, said Maersk.

However, the trend is expected to turn around as inventory restocking begins, giving a boost to exports out of the country, it said.

With the demand picking up again and limited warehousing capacity in the market, Maersk aims to close the gap between higher demand and shortage of supply through this facility at Chattogram, the shipping company said.

Vikash Agarwal, managing director of the Maersk South Asia, said "We continue to invest and strengthen our commitment to Bangladesh with the expansion of our footprint in the country."

"We strongly believe in the potential of this country and its exporters, and we are fully committed to participating and playing a role in their respective growth stories," he said.

Maersk and Ispahani Summit Alliance Terminal Limited (ISATL) had first collaborated and entered into an agreement towards the end of 2021 and within a period of 14 months, ISATL provided 200,000 square feet of export custom bonded warehouse to Maersk, according to the press release.

Maersk also offers another 100,000 square feet of warehousing space in partnership with Vertex Depot, which was inaugurated earlier in February this year.

With the latest expansion, Maersk has on offer over half a million sq. ft. of dedicated export warehouse in Chattogram to its customers, it said.

Maersk also offers another 300,000 sq. ft. of flexible warehousing capacity through local partnerships to customers in case of short-term requirements, it added.

 

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The government is set to embark on its second-largest self-financed project following the completion of the Padma Bridge.

The upcoming venture is Eastern Refinery Limited, Unit 2 (ERL 2), at an estimated cost of Tk23,746 crore. The project will be implemented from July 2022 to June 2027.

The finance ministry will contribute Tk16,142 crore in loans, while the implementing agency, Bangladesh Petroleum Corporation (BPC), will provide the remaining Tk7,100 crore.

In 2012, when the World Bank withdrew its funding of $1.2 billion for the Padma Bridge project, the government made a commitment to finance it independently, and successfully fulfilled that promise.

Similarly, facing difficulties in securing funds from foreign sources for the ERL 2 project, the government has resolved to finance the project with its own resources.

A BPC official, requesting anonymity, told The Business Standard that ERL 2 will be set up using state-of-the-art technology to refine various types of crude oil, including Russian crude oil.

The country's only state-owned refinery currently does not have the capacity to refine Russian crude oil at a time when global fuel oil prices have soared as a result of the Russia-Ukraine war.

Once the project is implemented, Bangladesh will be able to import and refine an additional three million tonnes of eco-friendly Euro 5 fuel oil per year, saving $9-10 per barrel in refined fuel considering current international market prices.

The project's original feasibility study report showed annual savings of $237 million with about $11 in savings per barrel.

The second unit of ERL will be able to meet 100% of the current demand for jet fuel and gasoline. Fuel oil can be exported after meeting local demand.

In addition, the production of two new petroleum products — lube base oil and sulfur — will be possible, which are now completely import dependent. Among these, lube base oil will be used as raw material for the production of lubricants.

Established in 1968, the ERL at Patenga in Chattogram can currently refine 1.5 million tonnes of crude oil per annum.

At present, ERL is meeting only 20% of the country's demand for petroleum products. The rest of the demand has to be met by importing refined oil at a higher price.

To meet the increasing demand for fuel oil in the domestic market, the government took up the "Installation of ERL Unit 2" project a decade ago.

The BPC tried to get funding from foreign countries and organisations, including Saudi Arabia's Aramco, to implement the project but failed. Later, the BPC decided to implement the project with its own finance.

According to BPC projections, the country's demand for petroleum products will stand at 8.03 million tonnes in the fiscal year 2026-27. In contrast, the total production of ERL and ERL-2 will be 4.5 million metric tonnes. As a result, there will be a shortfall of around 3.53 million tonnes with the demand for petroleum products.

A crucial project for Bangladesh

After the Ukraine-Russia war broke out last year, fuel oil prices soared in the international market. Bangladesh, like India and China, took the initiative to import crude oil from Russia at a low price and refine it. But that initiative did not work due to a lack of refining capacity.

At such a time, the Ministry of Finance has agreed to lend Tk16,142 crore for the implementation of the project, which the BPC will pay back within seven years.

The BPC will finance Tk7,100 crore and will seek the remaining Tk493 crore from the Ministry of Finance. If the ministry does not provide the money, the BPC will fund it itself.

A meeting of the ERL Unit 2 Project Evaluation Committee, chaired by Planning Commission Member Abdul Baki, was held in the commission in April. In that meeting, the BPC was asked to make several changes to the Development Project Proposal (DPP) and send the proposal to the Commission again.

According to the minutes of the meeting, 123 acres of BPC's own and leased lands will be used for its implementation. Another 50 acres of land will be leased for a temporary site facility.

A senior official of the Planning Commission, on condition of anonymity, said the Finance Division has consented to this project. Moreover, the implementation will not require much money at the beginning.

In view of this, the PEC meeting recommended in favour of the project. However, the final decision will be taken by the Executive Committee of the National Economic Council (Ecnec).

Project background

The project was sanctioned by the prime minister in 2014 under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act, 2010. In 2013, the cost of the project was estimated at Tk13,000 crore.

Last year, the BPC sent the proposal to the Planning Commission to get approval for implementation with its own funding. The project expenditure was then proposed at Tk19,769 crore which has now increased further to Tk23,746 crore.

When asked about the cost increase, ERL 2 Design Project Director Masud Alam told TBS that the additional cost has been estimated owing to a rise in the dollar rate and prices of construction materials.

He also said that the design work of ERL 2 is almost completed.

 

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