China to give $700m for six development projects.

[Homo Sapiens]

http://www.dhakatribune.com/banglad.../25/china-give-700m-six-development-projects/
China to give $700m for six development projects

• Asif Showkat Kallol
• Published at 11:32 AM July 25, 2017

Flags of Bangladesh and ChinaDhaka Tribune
China wants to boost bilateral economic ties with Bangladesh

China has assured the government of providing a fund of $700 million for six development projects, including the country’s Power, ICT and Infrastructure sectors, officials have said.


They said it is a part of Chinese President Xi Jinping’s promise to offer Bangladesh $24 billion for 27 development projects during his visit last year.

China wants to boost bilateral economic ties with Bangladesh.

Sources in Economic Relations Division (ERD) said the Chinese authority in a recent letter to the division said they would disburse the fund by December this year.


Each of the total 27 projects will have separate agreements that will bring in separate funds.

Bangladesh has already sent a list of priority projects to China in January this year.

After finishing scrutiny of the six development projects, China will start disbursing fund.

Of the six projects, two Power plants will get $3 billion, Padma Bridge rail link $3.10 billion, Info Four network $1.56 billion, BTCL $1.60 billion and Single Point Mooring Terminal $5.00 billion.

ERD Secretary Kazi Shafiqul Azam told the Dhaka Tribune China has assured funding primarily for six development projects and a deal will be signed shortly.

Another source in ERD said funding for the development of Dhaka-Sylhet four-lane highway is almost at the final stage.

All district and upazila level government offices will be brought under broadband network through the Info Four project, it said, adding that modernisation of optical network project will be done to improve telecommunication network across the country.

The single point mooring project has been taken up to supply fuel oil from Maheshkhali to Karnaphuli.

According to the ERD source, some loan will carry a 2% interest rate while some 3%. The loan will be paid within 15 years with a five-year grace period.

It said 70% of $2 billion loan for Power plants will be paid with 3% interest rate while the remaining 30% will have 2% interest rate.

Generally, Chinese debt is more expensive than donor agencies while loan payment conditions are also a bit difficult.

Apart from this, the Bangladesh authority can raise no question about the quality of work due to lack of competitive bidders.

Economists discourage China financing to implement development projects for these reasons.

Former finance adviser to caretaker government Mirza Azizul Islam said: “Chinese debt is expensive and the pressure on the government to pay interest will increase.”

According to him, all necessary purchases required to implement the projects have to be done from China while contractors will also be nominated by the Chinese authority.

The World Bank and the ADB currently provide loans for Bangladesh at 1% interest rate with a 25 to 30 years of payment period.

However, to implement the project with the loan of these two lenders, their policies are compulsory to follow.

Therefore, irregularities in such foreign-assisted projects are very low because of strict rules. Japan debt is the cheapest among those drawn from development partners of Bangladesh. Japan lends only at 0.25% interest.

According to ERD source, the six projects will be implemented in line with previous regulations set by the Chinese government that agreed to implement the projects through a limited tender.

It said according to the Chinese bidding policy for Bangladesh, it will allow only a limited number of bidders only from China, and offer them the project work.

No such project has been implemented under limited tender before.

 

[Homo Sapiens]

China has assured the government of providing a fund of $700 million for six development projects, including the country’s Power, ICT and Infrastructure sectors, officials have said.


They said it is a part of Chinese President Xi Jinping’s promise to offer Bangladesh $24 billion for 27 development projects during his visit last year.

I remember, some Indian were claiming than, this 24 billion dollar Chinese credit will never materialize.Now rotten eggs and tomatoes in their face.It has already started just after 8 months of initial agreement.
@wanglaokan

 

[帅的一匹]

I remember, some Indian were claiming than, this 24 billion dollar Chinese credit will never materialize.Now rotten eggs and tomatoes in their face.It has already started just after 8 months of initial agreement.
@wanglaokan

the stronger BD is, the better China will be. BD is a huge market, and China is also a mammoth market for BD. Cheers!

I remember, some Indian were claiming than, this 24 billion dollar Chinese credit will never materialize.Now rotten eggs and tomatoes in their face.It has already started just after 8 months of initial agreement.
@wanglaokan

the stronger BD is, the better China will be. BD is a huge market, and China is also a mammoth market for

 

[Zer0reZ]

Looks like investment for BCIM corridor btw China interest rate is 2-3% as India & Japan is here while its above 5% for countries like pak.

 

[axisofevil]

I remember, some Indian were claiming than, this 24 billion dollar Chinese credit will never materialize.Now rotten eggs and tomatoes in their face.It has already started just after 8 months of initial agreement.
@wanglaokan

I think you are confused....Indians think this would definitely materialize as China wants Bangladesh to be in their sphere of influence.......They want Banglas to recognize them as the middle kingdom again. As many enlightened individuals know, all these loans and credit come with strings attached.....

 

[TopCat]

I think you are confused....Indians think this would definitely materialize as China wants Bangladesh to be in their sphere of influence.......They want Banglas to recognize them as the middle kingdom again. As many enlightened individuals know, all these loans and credit come with strings attached.....

Sure... Done.

Looks like investment for BCIM corridor btw China interest rate is 2-3% as India & Japan is here while its above 5% for countries like pak.

Most of the projects in CPEC are BOT projects done by Chinese companies. These chinese companies collect those money in commercial rate.
For BD, these are govt infrastructure projects. Total risk burden taken by the BD govt, whereas for BOT project in PK, the companies has to recover the money by themselves and the risk is high.

 

[Zer0reZ]

Most of the projects in CPEC are BOT projects done by Chinese companies. These chinese companies collect those money in commercial rate.
For BD, these are govt infrastructure projects. Total risk burden taken by the BD govt, whereas for BOT project in PK, the companies has to recover the money by themselves and the risk is high.

Well anyway, better road network of Bangladesh is good development for India too.

 

[Nilgiri]

I remember, some Indian were claiming than, this 24 billion dollar Chinese credit will never materialize.Now rotten eggs and tomatoes in their face.It has already started just after 8 months of initial agreement.
@wanglaokan

Lol, what fraction is 700 million out of 24 billion? We never said there would be zero conversion rate, it will just be pretty low (and lot is because of BD own bureaucracy being so inefficient, corrupt and filthy).

24 billion will most certainly not materialise given MOU nature (if you know anything about how MOU's work in reality especially for low liveability, highly corrupt LDCs).

Next year will be yet another failure for BD in FDI (matters much more than GCF loans if you are to expand out of single-industry economy)...and the year after that....and the year after that (notice a trend?). Watch BAL continue to extract more money out of nascent BD economy more and more with little to show for it. Zero real reform and capacity handling improvement, Chinese know that very well....you can enjoy the next tranche at whatever time period it comes and say this is "24 billion" materialising.....BBS persona runs deep in all of you....no understanding of the actual reality, or just sheer ignorance/denial manifesting.

 

[UKBengali]

Lol, what fraction is 700 million out of 24 billion? We never said there would be zero conversion rate, it will just be pretty low (and lot is because of BD own bureaucracy being so inefficient, corrupt and filthy).

24 billion will most certainly not materialise given MOU nature (if you know anything about how MOU's work in reality especially for low liveability, highly corrupt LDCs).

Next year will be yet another failure for BD in FDI (matters much more than GCF loans if you are to expand out of single-industry economy)...and the year after that....and the year after that (notice a trend?). Watch BAL continue to extract more money out of nascent BD economy more and more with little to show for it. Zero real reform and capacity handling improvement, Chinese know that very well....you can enjoy the next tranche at whatever time period it comes and say this is "24 billion" materialising.....BBS persona runs deep in all of you....no understanding of the actual reality, or just sheer ignorance/denial manifesting.

Your retardation shows no bounds.

So BD will be unable to obtain the 3.1 billion US dollar loan for something like the Padma Bridge rail link? BD is spending 4 billion US dollars of it's own funds for the actual bridge itself and so the rail link will be a breeze. BD debt as a percentage of GDP is the lowest in the sub-continent by a mile. Economic growth is over 7% according to ADB - I am not interested in your predictions for the future but rather what has been happening for the last 2 decades.

Not saying that BD does not have issues but the 24 billion US dollars for infrastructure projects is not something so significant as BD is currently spending 6 billion US dollars a year on infrastructure - this has grown from 2 billion US dollars in 2010. It will help hugely but it will not be the end of the world if it does not materialise.

I suggest you get a life and stop this obsession with BD.

 

[Nilgiri]

Not saying that BD does not have issues but the 24 billion US dollars for infrastructure projects is not something so significant as BD is currently spending 6 billion US dollars a year on infrastructure - this has grown from 2 billion US dollars in 2010. It will help hugely but it will not be the end of the world if it does not materialise.

I am responding to the clueless clown that thinks someone said exactly 0 of 24 billion will materialise, and that any small piddly amount is a counter-proof of what wasn't even said in the first place (what was said was 24 billion is total MOU amount and you can look anyplace in the world to see what MOU conversion rate is at best).

If you want to remain an investment starved country by other much better means that need genuine reform and capability provision (i.e FDI)...just so that you can prop up political dynasties, no one cares....you just suffer long term and remain in LDC category firmly.

Inserting small chump change liquidity into already major league corruption organisation that is BD govt means next to nothing. Your end-delivery is rotten and stagnant. Quoting me BD numbers mean nothing to me when the organisation spending them is inherently a crooked mafia with seemingly legions of yes-man bureaucrats who take their cut all along the way too.

There is a fundamental reason why BD FDI does not increase appreciably even though its been years of "political stability" now, why BD govt is forced to go for loans instead (BD companies have even harder time raising capital because they stink too) and why the oft quoted best BD company has only 6% local market share for something as basic as motorcycle (with earlier threads projecting billions of exports from said company by this year).

Fundamentally the LDC problem has stuck to you good and hard, and you seem to enjoy retreating further into it whenever the issues are brought up.

BD debt as a percentage of GDP is the lowest in the sub-continent by a mile.

Little to do with conservative management, more like no one in their right mind sees you as worthy place to lend money (esp short term, high quality liquidity) to....same reason as the FDI. Hence you have to do these govt - govt MOU deals with just basically a handful of countries.