The construction work of the Indian special economic zone (SEZ) at Mirsarai in Chittagong is most likely to get momentum after a long time as Indian Exim Bank has shortlisted two Indian construction firms in this regard, sources in the Bangladesh Economic Zone Authority (BEZA) said.
Saroj Khuntia, general manager of Export-Import Bank of India, sent a letter to Md Shahriar Kader Siddiky, additional secretary of Economic Relations Division on May 5, informing that two Indian firms---Adani Ports and Special Economic Zone Limited and International Seaport Dredging Private Limited – have pre-qualified for land development) at Mirsarai under the India’s Line of Credit projects.
The revised pre-qualification of the construction contractors for land development for establishment of Indian Economic Zone (IEZ) in Mirsarai, based on the specification and criteria provided by the Bangladesh government was undertaken by the Exim Bank in line with the government of India LOC guideline dated back in December 7, 2015.
As per the provisions of the LOC guidelines, the Bangladesh government has been requested to forward a full set of tender documents, bid evaluation report and draft contract agreement to EXIM Bank.
Md Mokhlesur Rahman, joint secretary and project director for the establishment of Indian SEZ in Mirsarai, said that implementation of the project will gain momentum soon after selection of a new contractor by Indian Exim Bank.
He said that progress in setting up an Indian special economic zone (SEZ) at Mirsarai in Chittagong will get momentum after selection of the contractor as both New Delhi and Dhaka in implementing the $115.63 million project.
The Executive Committee of the National Economic Council (Ecnec) had approved $115.63 million for the project on April 9, 2019.
As per agreement, the Bangladesh government will give $630,000 while India will provide the remaining $115 million.
The duration is from April 1, 2019 until June 30, 2023.
Meanwhile, in December last year, Indian Exim Bank evaluated the prequalification application of three Indian contractors, but none was qualified for short-listing.
However, only Tk40 lakh, or 0.04% of the total project budget was spent as of January 31 this year, according to sources of the Bangladesh Economic Zone Authority (Beza).
An Indian diplomat in Dhaka said that the Indian side was sincere in completing the construction.
Background
Sources said that Indian authorities approved $115 million in funds for the project on June 11 under its third Line of Credit (LoC) worth $4.5 billion to Bangladesh, which was agreed upon in 2017.
As per the agreement, Beza will hand over the land to the Indian developer to start the development work at the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN).
The ISEZ, to be set up on 1,000 acres of land, will cater to Indian investors.
According to the project paper, $55.52 million will be spent to develop land in the area.
Meanwhile, Bangladesh Economic Zones Authority (BEZA) has recently inked a term sheet with Adani Ports and SEZ Limited of India in Mumbai as project management consultants to establish an Indian Economic Zone (EZ) under the government-to- government (G2G) engagement.
A term-sheet is a nonbinding agreement that shows the basic terms and conditions of an investment.
Through this sheet, full-fledged activities for the development of the Indian EZ will begin.
Other processes, including the formation of a company, to operate the EZ will begin in phases.
A memorandum of understanding (MoU) was signed between Bangladesh and India in June 2015 to establish the Indian EZ.
In this context, India selected Adani Ports and SEZ Limited to work as a developer of the EZ.
Talking to the media, BEZA executive chairman Shaikh Yusuf Harun said BEZA signed the agreement to attract more Indian investors in the country.
He hoped that the zone will be able to attract Indian investors as it is going to be an international standard EZ by ensuring all investment friendly facilities.
Harun, however, said Bangladesh is becoming a center of the global business community which will help the country achieve Vision-2041.
"Very low labour cost, skilled manpower, favourable government policies, uninterrupted electricity supply, high productivity and political stability are turning Bangladesh into a global investment hub despite the Covid-19 pandemic," he added.
Indian EZ is being established at Mirsarai in Chittagong under the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) on about 857 acres of land with a cost of about Tk964 crore.
It is to be noted that a term sheet is a bullet-point document outlining the material terms and conditions of a potential business agreement, establishing the basis for future negotiations between a seller and buyer.
It is usually the first documented evidence of possible acquisition. It may be either binding or non-binding.
Bangladesh's exports to the Indian markets are expected to reach $2 billion for the first time at the end of the current financial year as the demand for Bangladeshi products is increasing to the neighbouring country.
India’s exports to Bangladesh rose 46% on an annual basis at $3.16 billion in January-March, securing it the fourth position after the US ($15.41 billion), China ($5.92 billion) and UAE ($5.34 billion), according to the latest data from the commerce ministry.
Indian merchandise exports to Bangladesh, which saw a 35.14% year-on-year growth to $0.95 billion in January and 17% to $0.94 billion in February, also witnessed a 93.45% annual jump in March to $1.26 billion.