BRI and Bangladesh: An Impressive Track Record of Partnership



Professor Mustafizur Rahman, Barta24.com, Dhaka
Pic: Collected

Pic: Collected

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Bangladesh formally joined the BRI in October 2016 when President of China Xi Jinping made an official visit to Bangladesh. BRI (Belt & Road Initiative) celebrates ten years of its founding anniversary this year, the milestone coincides with seven years of Bangladesh’s involvement with this defining initiative of the twenty-first century.

Following the signing of the MOUs during his visit, President Xi stated “We agreed to elevate China-Bangladesh ties from a comprehensive partnership to a strategic partnership”. On her part, the Prime Minister of Bangladesh  Sheikh Hasina mentioned “Bangladesh is willing to actively work with China within the framework of the BRI, and support building an Economic Corridor linking the BCIM so as to push forward development in various fields such as investments, agriculture, transport infrastructure and connectivity”. Looking back, over the past seven years considerable progress has been made to take the partnership forward in line with the aforesaid statements by the two leaders.

The five pillars of BRI are: Facilitating Connectivity, Unimpeded Trade, Financial Cooperation, People to People Connectivity and Policy Coordination. As may be recalled, deals worth about USD 40.0 billion were signed at the time of President Xi’s visit, with investment projects of both Government to Government and joint ventures types. The various projects that have already been implemented and are planned to be implemented, fall under many of the aforesaid pillars of cooperation. These projects are being implemented in Bangladesh with financial, technical and implementational support from China.

Many Chinese construction companies are involved. The projects include transport and infrastructure,development and modernisation of information and communication technology (ICT), strengthening of power system network and enhancement of public utilities such as Dasherkandi Sewage Treatment Plant which is the largest in South Asia as also many others.

These infrastructures are critically important for Bangladesh’s sustainable economic development and well-being of its people. For example, the 170 km rail line over the Padma multi-purpose bridge which connects the capital Dhaka with 20 southern districts of Bangladesh is a vitally important transport connectivity project that will help bring Bangladesh under a unified rail and multimodal connectivity network; the distance between Dhaka and the end point (Barishal) will be reduced significantly.

Peoples travel time will come down significantly, cargo movement will be facilitated and marketing and distribution of products will be speedier. The rail line will be a key component of multi-model connectivity not only for Bangladesh but also will link Bangladesh with the Trans-Asian Transport network.

Built with Chinese finance (60 percent, with rest coming from Bangladesh government) and by Chinese companies, the rail link, in conjunction with the recently built bridge over the river Padma (built with Bangladesh’s own finance), is expected to be operation in 2024. The rail line will play an important role in realizing the potentials of the planned special economic zones to be built in southern part of Bangladesh.

Chinese experts, engineers and workers are helping Bangladesh to build many of these infrastructures. Chinese Exim Bank, the Asian Infrastructure Investment Bank and New Development Bank are helping Bangladesh to access the much needed credit.

Yet another project being implemented is the tunnel under the river Karnaphuli in the south, the first of its kind in South Asia. The tunnel will connect the Korean Export Processing Zone, Dhaka-Chattogram-Cox’s Bazar Highway, and the Chattogram airport and will also be part of the Asian Highway. The tunnel will facilitate connectivity with Bangladesh’s first deep sea port being built in Matarbari in the south. The Dhaka-Ashulia Elevated Expressway is yet another important transport link being built with Chinese support which will significantly ease the prevailing traffic congestion in the Dhaka city.

The power system and Power Grid Network projects being built with Chinese support will help Bangladesh to ensure energy security, while the support for Telecom and ICT Network projects will enable Bangladesh to access the benefits of the twenty-first century ICT as also the fourth industrial revolution (4IR).

The nine mega-projects under construction in Bangladesh at present, with about USD 10.0 billion credit support from China, will help attract domestic and foreign investment to Bangladesh, generate employment, strengthen competitiveness and help earn foreign exchange through export. It is important that these projects are built in a cost-effective way and put into operation in a timely manner so that the Bangladesh economy could reap maximum benefits from these investment and the expected rates of economic and financial returns areassured.

When completed, these projects will play an important role in Bangladesh’s development through triangulation of transport-logistics connectivity, investment connectivity and trade connectivity.

While the highly promising BCIM-Economic Corridor Project is for now halted, there is a potential opportunity for Bangladesh to take advantage of the transport networks being built with help from China in Myanmar, and by India in Bangladesh (with support of the three lines of credit offered by India).

All these together will strengthen Bangladesh’s multimodal connectivity which is expected to help the Country to translate its comparative advantages into competitive advantage. These will play an important role in view of Bangladesh's strategy to deepen regional and sub-regional cooperation in Southern Asia.

Over the recent past years, Sino-Bangladesh bilateral relationship has also branched out into many new areas. Many Bangladeshi students are studying in Chinese institutions for higher studies, thanks to scholarships provided by the Chinese government. Various exchanges between the two countries involving policymakers, business people, investors and academics of the two countries have seen notable rise in recent years.

China continues to remain by far the largest source of import for Bangladesh (about USD 25.6 billion). However, Bangladesh’s export to China has remained dismally low, at less than USD 1.0 billion in spite of the duty-free, quota-free preferential treatment accorded by China for almost all exports from Bangladesh.

Going forward, Bangladesh will need to strengthen its supply-side capacities to take advantage of the more than USD 2720.0 billion worth of annual import market of China. It is crucially important to ensure that Bangladesh is able to generate the expected income from the Chinese projects to meet the debt servicing liabilities, in time and with ease.

This will be possible if, thanks to the Chinese projects in Bangladesh, investment is stimulated, economic activities are boosted, income earning opportunities are created and government’s revenue earning projections are realized. In this regard, attracting Chinese investment to Bangladesh, which is able to take advantage of the infrastructures being built with Chinese support, can play an important role.

If the supply-side capacities created by the Chinese investment enable Bangladesh to access the Chinese market with competitive strength thanks to preferential market access offered by China, this will help bring down the existing bilateral trade gap the large size of which is a concern for Bangladesh.

As BRI crosses the milestone of its first decade, one hopes that Bangladesh-China bilateral relationship will deepen over the the next decade, to the benefit of our two economies and our two people.

Bangladesh at present stands at a crossroads. Diversified bilateral cooperation with China can potentially be a key driver if Bangladesh is to reap the benefits of its geographical location as an important gateway to the Bay of Bengal, by deepening regional cooperation with countries in its neighbourhood. Bilateral relationship with China could be a game changer and play a defining role in this connection.

[Professor Mustafizur Rahman is a Distinguished Fellow at the Centre for Policy Dialogue (CPD)]

 

Proposal to spend Tk. 2500 crore for modernization of GK irrigation project



Special Correspondent, Barta24.com
Proposal to spend Tk. 2500 crore for modernization of GK irrigation project

Proposal to spend Tk. 2500 crore for modernization of GK irrigation project

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In addition to the failure of pumps, the amount of irrigable land under the Ganges-Kobadak (GK) Irrigation Project, implemented with the aim of bringing 1.42 lakh hectares of land under cultivation, has come down to 95.62 thousand hectares due to the destruction of canal dikes and the deposition of silt.

Under this once-largest irrigation scheme in the country, which is gradually decreasing capacity, 51.55 thousand hectares of land was cultivated in the fiscal year 2020-21, which was about 40 thousand hectares in the following two fiscal years.

The Ministry of Water Resources has sent a project proposal titled "Rehabilitation of Ganges-Kobadak Irrigation Project" to the Planning Commission at a cost of about Tk. 2500 crore.

Recently, the Project Evaluation Committee (PEC) meeting organized by the Agriculture, Water Resources and Rural Institutions Division of the Planning Commission recommended restructuring the proposal with several suggestions.

The revised Development Project Proposal (DPP) in the light of the recommendations will be presented to the Executive Committee of the National Economic Council (ECNEC) for final approval after it is submitted to the Planning Commission. If approved, the project will be implemented by the Bangladesh Water Development Board (BWDB).

According to the Ministry of Water Resources, the GK Irrigation Project was undertaken in 1954 with the aim of increasing agricultural production by bringing 13 upazilas of Kushtia, Chuadanga, Magura and Jhenaidah under irrigation in four districts of Khulna Division.

The first phase of the GK project started in 1955-56 and ended in 1969-70. Later, when the project was expanded in the second phase, it covered three main canals, 49 branch canals and 444 sub-branch canals.

According to the proposal, two of the three main pumps under the project are currently inoperative. Another pump is kept operational through routine repair work. Apart from that, various limitations have been created in this irrigation project over time.

It also said that during the dry season, when the water in the main canals goes below 4 meters from the sea level, subsidiary pumps are used as the main pump does not work.

However, in 2004-05, the damaged subsidiary pumps became beyond repair and irrigation stopped when the water level fell.

It is said to highlight the rationale of the new project, out of the 49 branch canals of the irrigation project, 20 dykes are completely damaged and irrigation cannot be done through them. The remaining 29 dykes are partially damaged.

On the other hand, out of 444 sub-branch canals, 208 have been filled with silt. As a result, even through the sub-branch canals, the desired level of irrigation is not possible.

In total, the current irrigable area of GK irrigation scheme has been reduced to 95 thousand 616 hectares.

The main works of the project include construction of GK Subsidiary Pump House in Bheramara Upazila of Kushtia along with re-excavation of the main connecting canal from the source mouth of the pump house.

Construction of connecting road from the main road of Bheramara upazila to the subsidiary pump house will also be done under the project.

Reconstruction of main canals of GK Irrigation Project, excavation of secondary and tertiary irrigation canals and drainage canals will also be done.

The project proposal expressed optimism that if all the canals were re-dug, the irrigable area could be brought back to its previous extent.

Abdul Baki, Member (Secretary) of Agriculture, Water Resources and Rural Institutions Division of Planning Commission presided over the recently held PEC meeting. When asked, he said that the GK irrigation project is very important for the region, but the project is not as effective as it used to be due to various reasons like filling up of canals and broken pumps. If new canal digging and other activities are implemented, the GK irrigation project will be useful for everyone.

He said that the proposal was sent back with several recommendations in the PEC meeting. He also said that if the proposal is restructured and sent to the Planning Commission by following all these recommendations, it can be presented to ECNEC.

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We are concerned, call for responsible behavior: Amin Helali



Ashraful Islam, Planning Editor, Barta24.com
Photo: Barta24.com

Photo: Barta24.com

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Amin Helali, the senior vice-president of Federation of Chambers of Commerce and Industry (FBCCI), an apex organization of businessmen, has expressed concern over vandalism, arson, obstruction of traffic and vandalism in the ongoing program surrounding the quota reform movement.

He spoke to Barta24.com about the situation arising in the quota movement on Thursday afternoon. Considering the size of the economy of Bangladesh, if the economic activities are stopped one day, there is an apprehension of a loss of one and a half to two billion US dollars, said the business leader, saying that it is not possible to overcome this loss even in 2-3 months.

Amin Helali had a question, how the businessmen are seeing the ongoing quota movement. In this context, he said, 'We businessmen are worried about what we are seeing today in the continuation of the agitation of the last few days. Traders need a peaceful environment. There will be meetings, marches, agitations, demands. Our economy has advanced because of the culture we have created in the last 15 years.

Only 14 lakh government employees. We have to remember that every year 27 lakh boys and girls enter the workforce. If this large number of youths is to be given employment, then the economy cannot be shut down. I think we should all be responsible citizens' said this leader of FBCCI.

Regarding the ongoing agitation, Amin Helali said, 'We think there is a rationale for the demands that the students are agitating on. But the matter is now in the law court. We have to wait for the solution. Not a big deal. But this must go through a process.

He thinks that there is no incident that needs to be done today. We will ask the government, students and all concerned to behave responsibly. Attitudes also need to change. Rules must be followed. But the situation is such that we do not obey the court. Every institution should be respected.

Referring to the negative effects of violent programs on the economy, Amin Helali said, "If the economy of the state is not prosperous, if the revenue is not deposited in the treasury, then where will the employment come from?" If the revenue is to come in, the private sector or the economic activity where it exists must be kept undisturbed. Here responsibility must be introduced. Everyone has an agenda here. We want to say, there should be mutual respect. Everyone should be united in the interest of the state.

Amin Helali said, "If we calculate, if the economy is damaged in one day, it cannot be recovered in three months." Adverse situation in the whole world now. We are going through a competitive situation. Even in that, if the unstable situation returns again, it is difficult to cut that loss.

"Investment in the private sector has decreased. Corona, Ukraine war-multiple polarization in the whole world is now a critical situation. The economy of Bangladesh is also affected by this. Peace and order is needed to overcome the crisis and turn around the economy. If the economy is damaged now, then we will fall into more crisis,” he added.

Questioning the nature of the ongoing movement demanding quota reforms, he said, "What is happening now...we think it is clear that it is not just students here. A lot of fuelers are involved here. It is the responsibility of the government to identify them and how to resolve the demands of the students.

Amin Helali also said in this context, 'As a citizen, I respect every democratic movement. But it has to be systematic. We do not want irregularities and we discourage them. And students will agitate on their campuses...the agitation is established. It is not possible for them to do the violence that they do today. I think this is where the marmalade comes in. Those who are playing as leaders, are taking the students in the wrong direction.

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Power capacity increased, actual production stagnated



Serajul Islam Siraj, Special Correspondent, Barta24.com
Power capacity increased, actual production stagnated

Power capacity increased, actual production stagnated

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The electricity production capacity does not match the actual production figure. The actual generation of electricity in the financial year 2023-24 was 10948 MW, which was only 10097 MW in the financial year 2022-23. That is, in the last financial year, the actual production of electricity has increased by only 900 MW.

According to Bangladesh Power Development Board (BPDB) sources, Bangladesh's power generation capacity (excluding captive) is 26,364 MW, including imports of 2,656 MW from India. And from July 2023 to last June 30, the total electricity production has been 95911 million kilowatt hours. Which is an hourly average of 10948 megawatts. As such, only 41 and a half percent of the capacity has been produced. And in FY 2022-23, actual production was only 40.53 percent.

The international standard for reserve margin (regular maintenance and contingency reserves of power plants) is 20 to 25 percent. An average of 59 percent of power plants there are sitting idle. If compared with production, this rate stands at 150 percent.

The reason for apprehension is that even if the power plant is sitting, the money has to be calculated from time to time for capacity payment. In the financial year 2021-22, the capacity payment has to be paid 18 thousand 977 crores. Due to this, the cost of electricity production is increasing by leaps and bounds.

According to Bangladesh Power Development Board (BPDB) data, the average production cost of electricity in 2019-20 was Tk. 2.13, in 2020-21 it was Tk. 3.16 and in 2022 it was Tk. 8 and a half, now the average cost of production has exceeded Tk. 12. .

Right now 60 percent of power plants are idle, the demand for electricity is not increasing as per estimates. On the other hand there are many mega projects including Rooppur Nuclear Power Plant. The coming of new power plants means an increase in the idle ratio. And sitting means increasing the average cost of production.

The Revised Power System Master Plan (RPSMP-2016) estimates 3 types of power demand in 2023 (according to high, medium and low speed of economy). The demand estimate according to the medium or based case was 23417 MW. Even the demand estimates do not match the reality.

BPDB is of the view that the power generation has been disrupted due to various reasons. When prices rise, oil-fired power plants are shut down. Due to which the current picture does not have the opportunity to consider the actual condition. If fully supplied according to demand (peak hours), the maximum demand can be 18 thousand MW. Currently the demand is fluctuating from 12 to 18 thousand megawatts. This figure is for the summer season, with winter demand sometimes falling below 10,000.

A BPDB official told Barta24.com on the condition of anonymity that load-shedding-free power supply is not possible due to various reasons including lack of coordination. There are various restrictions depending on the region and time. There are also restrictions on circulation, distribution and production in certain regions. If full supply is provided, the peak demand during summer can be 19,000 MW. In that view the reserve margin is appropriate. However, peak demand falls below 10,000 in winter. This issue is a big challenge for Bangladesh.

Due to the large gap between demand forecast, production capacity and reality, many people are seeing the danger of crisis. For various reasons, the question has started to arise, whether the power generation capacity is increasing, the demand is increasing. If the demand does not increase, how will the power sector pull the burden of idle power plants?

100% electrified, now there is limited scope to increase usage through residential expansion. The standard of living of the customer is improving, AC, refrigerator will be installed in the houses, which will increase the demand. The use of energy saving lights, fans, AC is also increasing there.

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Is the Energy Regulatory Commission taking the form of a 'dead horse'!



Serajul Islam Siraj, Special Correspondent, Barta24.com, Dhaka
Is the Energy Regulatory Commission taking the form of a 'dead horse'!

Is the Energy Regulatory Commission taking the form of a 'dead horse'!

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Bangladesh Energy Regulatory Commission (BERC) is not able to do anything except wasting time on the question of increasing gas prices for residential unmetered customers.

Sources say that the regulatory agency is not able to directly cancel such an invalid application due to the fear of the government. Instead, it has been hanging for years. However, the legal documents say that there is no opportunity to increase this price now. BERC is unable to give a decision due to both crises. Energy Division officials say that this unnecessary delay is unprecedented. They even call it illegal. Because it could not take steps to increase the price, BERC has also suspended the application for increasing the amount of gas allocation for unmetered residential customers for a year.

There is no opportunity to hang the application like this for a long time. Either accept or cancel. Such indecisiveness can be suicidal for BERC, say stakeholders.

They say this will render BERC ineffective. At one point, the organization will become a 'dead horse'!

The best opportunity will be taken by those who want to make BERC ineffective. This incident will give them an opportunity to say that BERC is not capable. They can easily say BERC cannot decide. BERC Act has been circumvented before using that shield.

Currently unmetered residential customers in the country are charged a fixed amount of gas bill. The customer has to pay the fixed bill whether he uses it, doesn't use it or uses more.

In this situation, Titas Gas has applied to increase the allocation from 55 cubic meters (Tk. 990) to 76.65 cubic meters in the existing one-stove connection and to increase it from 60 cubic meters (Tk. 1080) to 88.44 cubic meters in the two-stove connection.

If the quantity of gas increases, the price will naturally increase. BERC last hiked gas prices on June 5, 2022. A public hearing was held in March before the order was issued. Then the statistics of customers using prepaid meters of distribution companies show that on average one stove is using 40 cubic meters and two stoves are using a maximum of 50 cubic meters. Based on the usage figures of prepaid customers, one stove is reduced from 73.41 cubic meters and two stoves from 77.41 cubic meters to 55 and 60 cubic meters respectively. Titas objected to BERC's order 10 months later. Titas Gas Transmission and Distribution Company said in its petition that BERC has fixed the gas allocation without any survey or analysis of data against about 25 lakh unmetered customers. This has increased the technical losses and the government for-profit organization Titas is facing financial losses.

Former member of BERC (Gas 2022) Maqbul E-Elahi Chowdhury told Barta24com that Titas Gas allegations are not true. According to him, this allocation should have been below 50 cubic meters.

Mokbul Chowdhury said that Titas had 3.5 lakh prepaid meters where it was seen that less than 45 cubic meters were used. It is known only by looking at the bill information of the prepaid meter. You don't need to know rocket science for this.

There are about 44 lakh residential customers across the country, out of which about 5 lakh use prepaid meters. Evidence of prepaid meter users does not in any way support the claims of the gas companies. Most of the statistics show that prepaid customers are using less than 30 cubic meters of gas on an average. That information is flashing at your fingertips. Not only had that statistics, BERC conducted a survey in 2019 with BIDS (Bangladesh Development Research Institute). The main objective was to provide a snapshot of gas usage by residential prepaid meter users and unmetered customers.

A survey was conducted on the customers of 6 companies in the country. That report is also in hand of BERC.

However, the report has been suppressed by the company for mysterious reasons. In December 2019, BIDS Senior Research Fellow Dr. Nazneen Ahmed and her team submitted that report. The report highlights the variation in usage by small households, large households and distribution companies and even between meters and non-meters.

According to the report of the survey conducted on 1054 residential customers in 13 districts, single burner prepaid meter users are using 35.5 cubic meters and two burners are using 59.3 cubic meters of gas. On an average, 57.9 cubic meters of gas were used by meter users. And non-meter customers used an average of 56 meters of gas. Despite having so much information, the distribution companies have taken the initiative to cut the pockets of 39 lakh unmetered customers. And despite knowing everything, BERC cannot show the courage to cancel the application.

There are many precedents in the past for rejecting incomplete and unfair proposals in the commission itself. But now the commission is walking on the path of unnecessary controversy. The concerned said that there is no precedent of hanging any price increase proposal for 1 year before.

Regarding the delay in the application of Titas Gas, BERC Chairman Nurul Amin told Barta24.com that they were asked to submit some documents due to lack of application. They delayed the payment because of the time taken. After that, Director Gas was appointed as a member of a committee who scrutinized and gave a report. The report is being worked on.

When asked about the legal aspects of being suspended for a year, he claimed that there was no exception.

But critics say, BERC is indecisive because of fear of the government. A major reason for the commission's fear is that the government clipped BERC's wings and caged it just when its wings were growing. In 2023, by amending the law, government decided to fix the price of gas and electricity by executive order. As a result the quasi-judicial institution has practically become unemployed. Some are even calling the commission a ‘dead horse’ now.

BERC was established as a neutral and quasi-judicial autonomous body through the Energy Regulatory Commission Act in 2003. The commission was established in 2009 to ensure accountability and consumer rights of gas and electricity distribution companies. So far 11 regulations have been formulated. Another 12 regulations have been pending approval for more than a century. BERC was fixing prices only at consumer level of gas and at wholesale and consumer level of electricity as the regulations giving power to fix prices of all types of fuel were pending. The price of fuel oil has always been given by the executive order of the Energy and Mineral Resources Division. The responsibility of which never came to the hands of the regulatory body.

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