The Prime Minister’s Office (PMO) has asked for careful scrutiny of big ticket development projects that are to be implemented under government-to-government (G2G) schemes, official sources said.
Officials said the move towards careful coordination and cost evaluation was necessary to implement projects identified as national priorities, sustain the growth rate of Bangladesh economy and retain Bangladesh’s excellent credit rating.
Finance Minster AMA Muhith warned ministries and divisions to carefully appraise Chinese government and private sector proposals in particular, officials said.
Last month, at a briefing following his return from the inauguration ceremony of the Asian Infrastructure Investment Bank (AIIB), Muhith said state-owned Chinese firms operate like private firms, aggressively trying to “sell” projects.
“They [Chinese firms] are interested in a number of projects. Even their state-owned companies are good salesmen. They bring their projects and get them passed,” he said.
China has offered to finance projects worth $10 billion in Bangladesh’s power, railways and infrastructure sectors.
Muhith asked officials to assess whether projects proposed by Chinese firms were relevant for Bangladesh.
“I should alert you. We will not accept many of the projects being pursued by [Chinese firms’] agents. You must look at your debt servicing capacity,” he said.
“Bangladesh has a wonderful record as far as public debts are concerned. We cannot destroy the record,” he added.
“It may be the case that a project is ranked 10th on my priority list, but a Chinese party wants it taken to the number one position,” he said.
“We must look at projects on the basis of our priorities.
“A project may seem important … but it may not be a national priority. We have prepared a list of priority projects. There is no need to go for projects other than those,” he said.
Asked if his observations would affect Bangladesh’s ties with China, Muhith said: “No, there will be no impact. I will safeguard my interests just as they safeguard theirs.
“My instruction to my colleagues is this: Please follow the priority list. Discuss the issues. Your discussions today will bring your projects onto the list of priorities three or five years down the road.”
Officials of the Finance Division said without careful valuation of development projects taken under G2G contracts, the country would fail to sustain a 7-8% GDP growth rate over the next few years.
Bridges Division committee formed
Bridges Division Secretary Khandaker Anwarul Islam told the Dhaka Tribune yesterday: “Ministries have been ordered by the Prime Minister’s Office to form an evaluation committee for G2G projects. As per the directive, the Finance Division has formed a committee for the Bridges Division.
“The committee will evaluate the procurement activities of G2G projects and act as a gatekeeper to check against asymmetries in G2G projects.”
According to a circular issued by the Bridges Division and signed by its Senior Assistant Secretary Mahmood Ibne Kasem, a nine-member committee headed by the division’s secretary has been formed to evaluate the asset value of its large development projects under G2G contracts.
The committee will include representatives from the Finance Ministry, PMO, Law Ministry, Economic Relations Division, National Board of Revenue, and the chief engineer and additional secretary of the Bridges Division.
The committee will determine the government’s position on whether to sign G2G deals to procure goods or services.
The committee will set G2G project costs with the help of a technical committee before placing the proposals before the Cabinet Committee on Public Purchase or the Cabinet Committee on Economic Affairs.
Senior Assistant Secretary Mahmood told the Dhaka Tribune: “The Prime Minister’s Office has already directed the Bridges Division to form an evaluation committee to evaluate the proposed and actual costs of all purchasable raw materials and goods under G2G schemes.
“This is the first time that the country’s development work will be run under the G2G scheme.”
Mahmood said development projects implemented under G2G contracts were more friendly than commercial deals.
According to the Bridges Division, the proposed Karnaphuli River tunnel will be implemented under the G2G scheme.
On November 24, 2015, the Executive Committee of the National Economic Council (Ecnec) approved the much-anticipated two-lane tunnel under the Karnaphuli River connecting Chittagong with Cox’s Bazar.
The project worth over Tk8,446 crore, the first of its kind in Bangladesh, is expected to improve the Dhaka-Chittagong-Cox’s Bazar road network.
The tunnel will reduce the road distance between Chittagong and Cox’s Bazar, apart from easing the heavy port city-bound traffic from Dhaka.
Of the total cost, the government will provide Tk3,647.20 crore. The rest will come from China as project assistance. The Bangladesh Bridges Authority will implement the project by June 2020.
