Infrastructure Projects in Bangladesh: Tokyo to invest under new arrangement

[bluesky]

December 11, 2017 / LAST MODIFIED: 11:01 AM, December 11, 2017
Infrastructure Projects in Bangladesh: Tokyo to invest under new arrangement
Japanese firms to get work without any bidding
Rejaul Karim and Wasim Bin Habib

Japan is going to invest in Bangladesh's infrastructure projects under a new arrangement in which its companies will work under the government-to-government system without participating in any bidding.

The Land, Infrastructure, Transport and Tourism Ministry of Japan, and the Public Private Partnership (PPP) Authority of Bangladesh will soon float a joint public private project management platform to this end.

The platform, to be comprised of permanent members from both the countries, will select Japanese companies for implementing the projects. It will also mobilise funds and monitor project implementation, say officials of the PPP Authority that works under the Prime Minister's Office.

The development comes amid commitments of billions of dollar from China and India for several infrastructure projects in Bangladesh. Chinese and Indian companies have already started working in the projects either through limited bidding or without it.

The PPP Authority officials could not say how much money would be invested under the new arrangement or how the funds would be mobilised.

Syed Afsor H Uddin, chief executive officer of the PPP Authority, and Yasuki Kaibori, deputy minister of Japan's land, infrastructure, transport and tourism ministry, signed a memorandum of understanding (MoU) in Japan in June.

“The PPP Authority will first identify infrastructure projects such as highways, ring roads, subways, and economic zones after having discussions with the ministries concerned,” an official of the PPP Authority told this newspaper yesterday.

“The joint management platform will then select a project for implementation.

After the selection, the company will carry out a feasibility study.”

Japan has been providing Bangladesh with nearly $2 billion as soft loans every year since fiscal 2012-13.

Apart from this, Tokyo will invest under the new arrangement, and Japanese banks will help with financing, said PPA Authority officials.

They also said the PMO last month sought the finance ministry's opinion on the new arrangement. And the ministry gave a positive feedback, saying there will be quality work under such projects.

Recently, China has pledged around $21.5 billion for large infrastructure projects in Bangladesh. Chinese companies will implement the projects.

Besides, India has committed around $7 billion. Indian companies will get work through selected bidding. And 65 to 75 percent of the materials to be used in the projects will be imported from India.

In a report published on December 8, Nikkei Asian Review, a financial newspaper of Japan, said Tokyo reached an understanding with Dhaka to build highways and other structures in Bangladesh under an exclusive arrangement.

Japan seeks to capitalise on this and other opportunities to surpass China, which has a much larger infrastructure footprint in developing countries due to its huge edge in pricing, it said.

“For instance, the Chinese accounted for 55 percent of Africa's infrastructure projects in 2015, compared with Japan's slim 1 percent market share. In the Middle East, China had a 17 percent share compared with Japan's less than 2 percent,” mentioned the report.

The Chinese are ahead in other parts of the world as well, such as Asia, Oceania and Europe.

With many of the Chinese projects delayed or revised, the Japanese government is trying to seize what it sees as a good opportunity to catch up, it added.

In a policy speech last month, Japanese Prime Minister Shinzo Abe said Japan's infrastructure exports increased by 10 trillion yen ($89 billion) in five years.

Still, the Chinese and South Koreans continue to enjoy pricing and political advantages over Japan

 

[mb444]

Very very bad news. Deals without tenders means more corruption and less transparency.....BAL gravy train rolls on unabated.

 

[Russell]

Awesome news...

Japan/JICA/Japanese banks/Firms have always done stellar work in BD.

More investment and best of all this is a direct result of two Asian powers wooing Bangladesh and wanting us to be on their side.

Win-win situation for Bangladesh.

 

[Divergent]

Tokyo actually has good strong infrastructure, so Bangladesh made a good deal.

 

[bluesky]

Very very bad news. Deals without tenders means more corruption and less transparency.....BAL gravy train rolls on unabated.

You may not be correct in these points. It is not the BD govt that will award a contract to a Japanese company. Rather, it is JICA which will direct the GoB to offer a certain contract to a certain Japanese company. JICA and Japanese people cannot be bribed, you have to understand this fundamental truth. Japan is a corruption free society from top to bottom.

The project works will be done by the Japanese surveying/consulting companies and the general contractors. The related GoB authority will certify each of the milestones of a job, based on which JICA will make payments to the contractors in Japan. GoB people will have some other minor works to do, I believe. GoB will keep on paying back the credit money in many years as stipulated in the contract between the two governments.

This system is certainly not a recipe for an expanded graft taking scheme by the corrupt BD officials. But, you must be very wrong about the corruption culture of BD officials specially when many of our people love to portray ourselves very pious in some other thread. You must be wrong here.

 

[mb444]

You may not be correct in these points. It is not the BD govt that will award a contract to a Japanese company. Rather, it is JICA which will direct the GoB to offer a certain contract to a certain Japanese company. JICA and Japanese people cannot be bribed, you have to understand this fundamental truth. Japan is a corruption free society from top to bottom.

The project works will be done by the Japanese surveying/consulting companies and the general contractors. The related GoB authority will certify each of the milestones of a job, based on which JICA will make payments to the contractors in Japan. GoB people will have some other minor works to do, I believe. GoB will keep on paying back the credit money in many years as stipulated in the contract between the two governments.

This system is certainly not a recipe for an expanded graft taking scheme by the corrupt BD officials. But, you must be very wrong about the corruption culture of BD officials specially when many of our people love to portray ourselves very pious in some other thread. You must be wrong here.

Here is the problem your position. Ultimately it is BD who pays for these work so we should vet who undertakes the work. Why on earth should BD trust any foreign organisation.

Lack of transparency is a sure fire recipe for corruption.

Japan is as corrupt as any other country in the world. I am attributing your perception of Japan as lack of experience.

The crux of the matter is this.. if you deliberately create an opaque system you will inevitably enable corruption. These are two sides of the same coin.

 

[bluesky]

Here is the problem your position. Ultimately it is BD who pays for these work so we should vet who undertakes the work. Why on earth should BD trust any foreign organisation.

Lack of transparency is a sure fire recipe for corruption.

Japan is as corrupt as any other country in the world. I am attributing your perception of Japan as lack of experience.

The crux of the matter is this.. if you deliberately create an opaque system you will inevitably enable corruption. These are two sides of the same coin.

It seems that unlike me, you yourself have a lot of experience and knowledge about what Japan and its inhabitants are. Yes, they are as or more corrupt than the pious people of Shonar Bangla.

 

[idune]

Very very bad news. Deals without tenders means more corruption and less transparency.....BAL gravy train rolls on unabated.

That is how awami league looted and awami cheer leaders justify their lootings

 

[mb444]

It seems that unlike me, you yourself have a lot of experience and knowledge about what Japan and its inhabitants are. Yes, they are as or more corrupt than the pious people of Shonar Bangla.

I have lived and worked in Japan during several projects, but that is irrelevant. You have failed to understand the basic point that is being made.

You know something the Japs themselves would never allocate projects sans transparency or in absence of a bidding process.

Only a fool would think this is a good idea or that the nation would benefit from such an arrangement. BD tax payers are being taken for a ride. This is absolutely criminal.

 

[Dot]

WTF... Japanese guy caught red-handed with gold bars!
http://www.thedailystar.net/city/japanese-held-11kg-gold-dhaka-airport-1519231

 

[bluesky]

Here is the problem your position. Ultimately it is BD who pays for these work so we should vet who undertakes the work. Why on earth should BD trust any foreign organisation.

Lack of transparency is a sure fire recipe for corruption.

Japan is as corrupt as any other country in the world. I am attributing your perception of Japan as lack of experience.

The crux of the matter is this.. if you deliberately create an opaque system you will inevitably enable corruption. These are two sides of the same coin.

When, where and how long you have lived in Japan, you did not say. Your corruption statement about Japanese society is unfounded. Do not please spread rumors about Japan without any knowledge about its inner system. Give us at least one example of govt level corruption there. I have seen a few people in the PDF who claim to be in Japan, and, therefore, know everything about it.

Padma Bridge is a project undertaken without bidding by a Chinese company (ies) and is financed with Chinese money. BD govt accepted one of the willing Chinese companies recommended by China. Do we have to presume this project is also a source of corruption?

 

[Dot]

Padma Bridge is a project undertaken without bidding by a Chinese company (ies) and is financed with Chinese money. BD govt accepted one of the willing Chinese companies recommended by China. Do we have to presume this project is also a source of corruption?

Padma Bridge Project work was given upon a bidding process. Current Chinese one along with one from South Korea and another one (can't recall) were shortlisted, where Chinese one made the lowest bid. We are self financing the entire project from our yearly budget, except India may have provided about $200 million initially as a grant towards it. But Padma Rail project is suppossed to be financed and done by the Chinese. Not much headway until now! Getting G2G finances from China is really a nightmare.....

 

[bluesky]

That is how awami league looted and awami cheer leaders justify their lootings

@idune, you do not like Awami League, me and now Japan. So, ask BD to print dollar to finance the construction of infrastructures. Do not you guys understand one simple thing?
1) Japan wants to invest in BD infrastructure.
2) Japan knows that the quality of its construction is top-ranked and is, therefore, expensive to implement.
3) Now, if the projects are free to bid by other countries, then countries like India, China, Italy will take away the contracts because their engineers and other technical staff is less expensive.
4) What benefits Japan will get if its own companies do not get the projects financed with Japanese taxpayers' money? Why should Japan then invest its billions to develop Shonar Bangla?

So, if BD is unwilling, then Japan will not finance the projects. This is as simple as water. Do you want your India to get all these projects by bribing the BD politicians and bureaucrats? Do you really want so? BD will probably reject this line of Tokyo thinking because the pious people in the govt will lose their percents of grafts. Instead, BD govt. people will go after WB and ADB money because this is how they can make their spouses happy with many new sets of ornaments.

But, this will only delay the development of BD by a few decades.

 

[Dot]

One beauty about Japanese, Russian, ADB, WB financed projects here in BD is that, we get to see maximum local participation into their projects (G2G). Whereas projects (G2G) financed by either China or India get minimal local participation regardless of the nature of the fundings. Eg. just look at Karnafulli Tunnnel project or Rampal. Our imbecile bureaucrates just blindly gave it all away.....

 

[bluesky]

just look at Karnafulli Tunnnel project or Rampal.

Rampal may be a politically motivated project innovated by Hasina Brgum herself to off guard Indian intrusion everywhere. But, are you sure about Karnafuli Tunnel project? Which company has been given the contract?

I only wish, BD govt to employ a dedicated local consulting company (not owned by the Shala or Dulabhai guys of AL ministers) to supervise when the foreign company does survey works, select the site and design the structures (any project done by foreign engineering companies).

BD govt. authority would directly employ the local company, assumed to be not very efficient, to learn in disguise of supervision of all these design related works. The foreign companies are required to submit their calculation sheets, drawings and other engineering documents to this local company instead of some ignorant govt. engineering authority. The local company will be liable to submit the papers to the govt authority.

This is how the local company will learn how to design by studying the documents prepared by the foreign engineers. The next similar projects can be awarded to this local, and a foreign company being employed by the BD govt. authority to supervise its survey, design works as well as the preparation of Specifications.