Prime Minister Sheikh Hasina will sit with Power Division officials today to know about the work progress of a series of under-construction power projects, implementation of which are at stake in the tenure of the present government due to fund constraints.

“PM will sit with us to discuss the power sector scenario and its financing,” Power Division Secretary M Abul Kalam Azad told daily sun yesterday.

The Power Division is worried over the implementation of 24 public and private sector power projects, with a stipulated production capacity of around 3,197 megawatt of power, by 2014 due to fund shortage.

A total of 13 out of 15 power projects being constructed under the private sector are yet to arrange funds to implement the projects. Besides, a public sector project has also failed to manage financing, Power Division officials said.

Through a letter recently, Power Division Secretary has informed the Prime Minister’s Office (PMO) about the private sector sponsors’ failure to open letter of credits (LC) to import equipments for their projects due to liquidity crisis of the commercial banks.

Following the letter, Prime Minister Sheikh Hasina has decided to hold a meeting with the Power Division senior officials to discuss the issue, sources said. The government earlier had decided to implement the private sector power projects with 70 percent funding from foreign sources.

“We need support from the Finance Division, Banking Division and Bangladesh Bank to implement the power projects with 70 percent foreign funding,” Azad said in the letter.

In the letter, he also sought help from the central bank and other commercial banks to open LCs for the import of power project equipments.

“If the concerned authorities fail to address the issues, implementation of the power projects under the private sector in the next two years would become uncertain,” the letter said.

Prime Minister’s Power and Energy Adviser Dr Tawfiq-e-Elahi Chowdhury told daily sun that the government is still stick to its plan to produce more electricity through private sector investment.

He also said the government would assist the private sponsors in mobilising foreign funds to implement their projects.

The World Bank has already refused to finance two mega power projects at Bibyana, awarded to Summit Group, a concern of Civil Aviation and Tourism Minister Faruk Khan’s family.

Meanwhile, two other power projects awarded to Aslamul Huq, a ruling party lawmaker from Dhaka-14 (Mirpur), are yet to mobilise fund, concerned officials of Bangladesh Power Development Board (BPDB) said. The lawmaker has no previous experience in power sector.

Besides, three mega coal-based power projects owned by Orion Group have also failed to manage funds.

According to Power Division, the government has so far added 3,330MW of electricity to the national grid in last three years from 47 power projects.

The present daily demand for electricity is recorded at 6,500MW against the supply of 5,000-5500MW.

“I think it’s a failure of BPDB to sign contracts with private sponsors without ensuring foreign funding to implement the projects,” said Professor M Tamim, former special assistant on power, energy and mineral resources to the chief adviser of a caretaker government.

He said none of the local commercial banks would be able to assist funding for the projects.

The Daily Sun/Bangladesh/ 12th June 2012

The local currency depreciated by Tk 0.25 against the dollar in the past week after stability for nearly two months, treasury officials said.

The average exchange rate of the greenback rose to Tk 82.44 yesterday for import payments (bills for collection) from Tk 82.20 on June 3, according to statistics from Bangladesh Foreign Exchange Dealers Association (BAFEDA).

“Declining export earnings and payment pressures for imports, particularly fertiliser, have played a part in depreciation,” a treasury official of a private commercial bank said.

Usually, the taka depreciates when the country's import payments exceed exports and remittances. In Bangladesh, almost all of its oil demand is met by import. Recent import demand for fertiliser has put additional pressure on the exchange rate.

Exports declined 4.13 percent to $2.2 billion in May from a year earlier. Businesses pointed at the dip in demand for apparel items in the Eurozone due to the ongoing debt crisis.

A senior Bangladesh Bank official said the recent depreciation of the taka against the dollar is within limits.

“The depreciation is insignificant compared to that in India by 4-5 rupees in a month,” said the central bank official.

He hoped the exchange rate would remain at Tk 82.50 throughout June.

The taka witnessed massive depreciation -- over 16 percent -- in between January 2011 and January 2012.

The Daily Star/Bangladesh/ 12th June 2012

The European Commission insisted Monday that Spain asked the IMF to contribute monitoring expertise to an aid programme agreed by eurozone finance ministers for Spain's financial sector.

According to the Commission, the International Monetary Fund will be part of a "Quartet" to conduct surveillance over Spain's finances -- with up to 100 billion euros ($125 billion) of loans for Spanish banks funnelled through a government body, the Fund for Orderly Bank Restructuring (FROB).

The role of the Washington-based IMF is politically sensitive in Madrid, with the Fund seen as pushing for the toughest austerity measures in previous, government bailouts for Greece, Ireland and Portugal.

Amadeu Altafaj, spokesman for EU economy commissioner Olli Rehn, said: "All members of the Eurogroup... including the Spanish authorities" had indicated during Saturday's video conference that they "wanted to have the IMF on board, to monitor, to have the benefit of their experience."

The Daily Star/Bangladesh/ 12th June 2012

Finance Minister AMA Muhith says he has done enough for the stockmarket, but the market is not improving.

“It's an evil market. I won't comment on it.”

An apparently frustrated Muhith yesterday responded to lawmaker Rashed Khan Menon's criticism of the stockmarket in parliament during the passage to the supplementary budget for the outgoing fiscal year.

But Muhith did not explain why it is an evil market.

Though at the beginning of his speech the minister said he would not comment on the stockmarket, he gave full vent to his feelings in an outburst at the wrap-up.

Muhith said the government plans to demutualise the Dhaka and Chittagong bourses by December and he would only talk about the market once demutualisation is done.

The minister also said the reason behind so much excitement over the stockmarket is that the prime bourse is located in Motijheel. He did not provide an explanation.

Most of the stock investors are young and buoyant with a lot of enthusiasm and the number is around 11 lakh, he said.

"The economy will not suffer if I don't worry about the stockmarket."

Coming down heavily on the critics of quick rental power plants, Muhith said achieving the country's expected economic growth would have not been possible without such power plants.

After his speech, the parliament gave a go-ahead to the Tk 8,880.47 crore supplementary budget for additional spending by ministries and divisions during the current fiscal year.

The railway ministry had the highest extra spending at Tk 3,890 crore, followed by agriculture at Tk 1,854 crore.

The Daily Star/Bangladesh/ 12th June 2012

Local poultry farmers at a seminar has sought government support for rescuing the sector from collapse.
Due to various mismanagements in the industry, the once-vibrant sector is now struggling hard for survival, they said.

They urged the government to introduce vaccine and other necessities like poultry insurance, bank loan with lower interest rates and tax exemption on poultry feed for removing the obstacles and smooth operation of the industry . 
The poultry stakeholders made the comments Wednesday at a seminar in city on 'Crises in Poultry sector: Immediate action'. 

Abdul Latif Biswas, minister of Fisheries and Livestock, was the chief guest at the programme. M A Sattar Mandol, member, Planning Commission, former Bangladesh Bank Governor Farash Uddin Ahmed, Moshiur Rahman, convener of Bangladesh Poultry Industries Coordination Committee and entrepreneurs from poultry sector, among others, were present in the seminar. 

On the entrepreneurs demand, Abdul Latif Biswas assured the farmers and said he already has taken some steps in this connection and others measures will be taken immediately.

He said Fisheries and Livestock Ministry already has taken decision in principle to introduce much-talked-about avian influenza vaccine with a view to eradicating the disease from the country.

"We have formed a committee with eight experts to give a report on the bird flu situation in the country," said the minister adding the committee has been given 72 hours (from last Monday) to submit the report to the ministry.

"At first we will use the avian influenza vaccine experimentally then it will be used widely", he added.

He also said he will hold discussions about bank loan, insurance and tax measures with the finance ministry before passing of the next budget (2012-13).

The ministry has strictly prohibited import of eggs from bird flu-affected countries so that the local firms remain safe from the disease, he said. 

Multinational companies are grabbing the industry gradually and this should be discouraged immediately, said Mousiur Rahman while presenting the keynote paper.

Farash Uddin Ahmed said poultry and crops insurance is very expensive and for this reason the insurance companies are not interest in it.

Therefore, the government should make special arrangement for the industry in this connection, he added.
He also suggested that the poultry farmers be provided with loans from the micro credit organisations at low interest.

The poultry entrepreneurs also sought duty waiver on import of poultry feeds. 

They said though the government has given tax holiday to the sector the import of poultry feed has been brought under 5.0 per cent duty.

The Financial Express/Bangladesh/ 7th June 2012