Soaring land prices hurt FDI, business

Dhaka, April 26: Soaring land prices and hassles in land acquisition deter inflows of foreign investment and the expansion of local businesses as well, according to two international organisations.

The land issue has made the country's development challenges more critical as Bangladesh faces two other major challenges -- how to upgrade infrastructure and ensure a large and skilled workforce.

"Availability of land for the public and private sector projects is emerging as a major challenge," said Asian Development Bank in a report published this month.

Also, Moody's Investors Services that rated Bangladesh Ba3 for 2011 last week found land acquisition remains problematic and the registry is in need of reforms.

"These impede the quicker realisation of larger inflows of foreign direct investment," said Moody's 2011 sovereign report on Bangladesh.

Bangladesh has received only $697 million of foreign direct investments (FDI) during the first 10 months of 2010 against registrations for $3.05 billion during the year, according to Board of Investment (BoI). In 2009, FDI inflow into Bangladesh was $700 million. Inadequate land and industrial plots and a lack of utilities are the major reasons behind the slump in the FDI inflows.

Local businessmen are also feeling the pinch of the soaring land prices.

A private commercial bank has bought a piece of land (21 katha) in Gulshan at Tk 150 crore last year to set up its headquarters.

"Land has become priceless in Gulshan. Sellers demand around Tk 10 crore a katha," said a businessman, claiming that it was Tk 3 crore a year ago.

The situation is more or less the same in the industrial areas, such as on the Dhaka-Mymensingh or Dhaka-Narsingdi roads.

Iftekhar Uddin Farhad who runs an export-oriented ceramics factory on Dhaka-Mymensingh road under Gazipur district said now a bigha of land is being sold at Tk 1 crore - Tk 1.5 crore, which was just Tk 30 lakh a year ago.

"Acquisition is more critical than the price. One has to deal with local extortionists and politicians in addition to corrupt land officials," said Farhad.

A study led by economist Dr Abul Barkat in 2007 found that growing population, rising per capita income and high rate of income growth have intensified the competition for accumulating the fixed asset (land) in Bangladesh.

The study also said massive migration from rural to urban areas has been putting immense pressure not only on urban facilities, but also poses a threat to proper use of the land. Inflows of remittances have also contributed to a soaring land price in recent years.

Banks' speculative financing also made the land price costlier in the past few years. Moody's Investors Services also found that the central bank at the end of 2010 curbed bank lending for speculative land purchases.

AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), urged the government to address the land price issue to avoid negative impacts on industrialisation.

"Higher land prices affect the overall production costs," said Azad.

He said businessmen and remitters buy land speculating manifolds return from the fixed asset with no risk.

"The government should ban the use of black money into land and impose higher tax to contain the price," said Azad.

According to government documents and individual researchers, over 150 million people live in around 14 million hectares of areas in Bangladesh. Per capita land is less than 25 decimal and out of which, only 15 decimal is farm land.

Source: The Daily Star

Projects to get buyer's credit from India

New Delhi, April 26: India said it will provide buyer's credit for projects in Bangladesh in a bid to boost bilateral trade.

Buyer's credit is the credit received by an Importer (buyer) from overseas lenders for payment of his imports. Buyer's credit is generally given on the understanding that the project developers would source equipment or technology from the credit-giving country.

"We will provide buyer's credit for projects in Bangladesh," said Indian Commerce Minister Anand Sharma on his return from Dhaka on Sunday.

Although the minister did not disclose the amount, it is believed that India may extend around $100 million.

Source: The Daily Star

Cabinet okays separate co for coal-based power

Dhaka, April 26: The cabinet on Monday approved a proposal for establishing the Coal Power Generation Company of Bangladesh Limited under the Bangladesh Power Development Board.

The Power Division placed the proposal at a weekly meeting of the cabinet presided over by the prime minister, Sheikh Hasina.

'The government has approved the proposal for establishing a company for coal-based power as the cost of power generation from gas or oil is much high,' the prime minister's press secretary Abul Kalam Azad told reporters after the meeting.

A Power Division official told New Age that the company would be formed aiming at generating 20,000MW of electricity by 2030 through setting up of coal-fired power plants.

The company will have a capital of Tk 8,00 crore and it will implement a series of power plants in the public and private sectors, he said.

The BPDB chairman would be the chief of the company while the 10-member board of directors would run it, he said.

A PDB official told New Age that the company would deal with coal-based power plants that would be installed under public-private partnership and under a joint venture with India's NTPC.

He said that the company would form a 50-50 partnership with NTPC to install a 1,320MW coal-based power plant in Khulna.

'We wanted to form a separate company to deal with NTPC and to give the joint venture a corporate look which is not possible under PDB,' he said.

The government recently signed a memorandum of understanding with India for setting up the coal-based plant under a joint venture.

Source: New Age

Increase in supply pushes down paddy price

Dhaka, April 26: With harvesting picking up and supply of new stock increasing on the market, price of paddy has started falling, market sources said.

Learning from farmers that yield of paddy has been very much satisfactory this year, market observers predict that price will continue to falling in the coming weeks.

At Abadpukur Bazar in northern Naogaon district on Tuesday, per maund or 37.3-kg of new stock od paddy of Jira-Miniket variety sold between Tk 800 and Tk 810.

In Naogaon and other major northern rice producing districts, new stock of paddy of boro varieties started arriving in the market just a week ago with Jira-Miniket price selling Tk 900 per maund.

As harvest had picked up, price of new stock of Jira-Miniket has dropped by Tk 100 per maund, said Belal Paikar, an Abadpukur trader. 'There is report in the market that farmers are having a very good yield in early harvesting. Hence a further fall on paddy price is rational as supply will  increase.'

At Abadpukur, midium grade and new stock of Parija-Paijam variety paddy sold on Tuesday between Tk 650 and Tk 660 with the price remaining almost the same over the week.

At Ashunagj on Tuesday, coarse Hira verity of paddy was traded between Tk 520 and Tk 550 [per maund of 40-kg] while medium grade BR-28 sold between Tk 660 and Tk 680.

'Price trend is mixed here as increased supply has pushed down the price of coarse variety rice by Tk 20-30 per maund in a week,' said Shanjoy Mohajon, a trader.

Shaheen Mia, another Abadpukur trader, observed that fall in the price of coarse paddy will be at lesser rates compared to that for the finer varieties of paddy. 'Framers have cultivated more land for finer varieties as their demand and price have been increasing sharply in recent years.'

Ashabuddin Mia, a trader at Kathpatto in Munshiganj, near Dhaka, said their market stated seeing arrivals of new stock of boro for the last four or five days.  At Kathpatti medium grade BR-28 variety of paddy price was Tk 650 but on Tuesday it declined to Tk 630.

Widespread harvesting of Boro, which accounts for nearly two-thirds of the country's rice output, starts after mid-April and continues till the end of June.

Decline in Boro production last year, because of damage to Haor crops and comparatively low yields in many other major rice-producing districts, resulted in a sharp and continuous rise in rice prices after the last Boro season.

The government claimed that the production target of 1.85 crore tonnes of Boro rice was achieved in 2009-10 fiscal year, but agro-economists and market observers said that production loss was 5 to 10 lakh tonnes. Extensive damage to crops in Haors and lower yields in many areas of the country last year caused a decline in output.

The government targeted cultivation of Boro on 47.20 lakh hectares but its revised estimate shows that the planted area increased to 49 lakh hectares. Boro output is estimated at 1.86 crore tonnes for the current 2010-2011 fiscal year.

Officials at the agriculture ministry said that they had received reports on the good condition of the standing Boro crop across the country and they hoped for a bumper harvest if nothing untoward takes place in terms of weather.

Source: New Age

DCCI urges removal of bureaucratic tangles to attract more FDI

Dhaka, April 26: Bureaucratic complexities faced by the foreign investors while making investment in any sector should be removed urgently for attracting foreign direct investment, DCCI president Asif Ibrahim said on Monday.

He said absence of continuity in public policies, burden of excessive ill-managed regulations and corruptions are the bottlenecks for which investors face loss and these barriers would have to be removed to ensure overall macro economic stability in the country.

Asif Ibrahim came up with this observation at a consultation meeting on 'Private Sector Assessment Study' at the conference room of the Dhaka Chamber of Commerce and Industry.

Keystone Business Support Company Ltd chairman and chief executive officer and North South University professor M Fouzul Kabir Khan presented the keynote paper in it jointly organised by the DCCI and Keystone Business Support Company Ltd.

The DCCI president said all businessmen of the country were not bankrupts or loan defaulters. Companies which borrow from banks work diligently and pay back the banks are not recognised at all.

He also said that they wanted to invest further but were constrained by high rates of interest of project loan by banks.

He called upon ADB to select 60-70 companies in Bangladesh and give those loans at 6 per cent to 7 per cent rate of interest.

He emphasised on energy security, business-friendly environment, institutional capacity improvement, improvement of governance, skilled labour force, increased domestic finance flow, continuity of policy and improved law and order situation to increase the GDP of the country.

Asif Ibrahim stressed on development of infrastructure to grab China plus One Strategy. It is unwise to increase the rate of interest right now as more businesses are coming our way, he mentioned.

Professor Khan said the present public private partnership initiative was not working at the desired level. He called upon to identify the bottlenecks for which PPP could not be more effective.

DCCI senior vice-president TIM Nurul Kabir requested the ADB to come forward for the development of IT and skill development of this sector in Bangladesh.

Source: New Age

Tea board head office demanded in Moulvibazar

Moulvibazar, April 26: Leaders of the Moulvibazar Chamber of Commerce and Industries have demanded that authorities should shift the head office of the Bangladesh Tea Board from Chittagong to Moulvibazar.

'We want the head office of the board to be shifted to Moulvibazar as the district is the main tea producing area of the country,' said MA Ahad, president of the MCCI, at a meet the press held at the MCCI office on Sunday.

He said the Bangladeshiya Cha Sangsad, an organisation of the tea garden owners, had supported the MCCI's another demand for establishing a tea auction shed at Srimongal of the Moulvibazar district.

There are two land custom ports in Moulvibazar district, Ahad said adding that the Monu River of Moulvibazar needed to be dredged urgently for easy transportation of goods.

He also suggested establishing two more land ports at Kurma and Dholaighat of the Moulvibazar district and setting up a wholesale market in the district headquarters.

Source: New Age

Robi deploys Oracle database machine

Dhaka, April 26; Robi, an Axiata Group company, has successfully deployed the Oracle Exadata Database Machine X2-2 to power its custom built data warehouse in support of their business.

Robi replaced HP-based platform and EMC storage servers with Oracle Exadata Database Machine X2-2 to optimise its data query process and perform management analytics more efficiently, said a news release on Monday.

Robi expects that the data warehouse will improve the external services offered to its customers, as well as reap a better return on the IT investment.

Source: New Age