'Bidding a hurdle to luring foreign investors to power sector'

---

FE Report
Board of Investment (BoI) executive chairman SA Samad Saturday said Bangladesh's policy acts as disincentive to potential foreign investors, saying they often want to bypass the tendering derided as lengthy and complicated.
"In Bangladesh, system and policies are not investment friendly," he said.
"Many foreign investors aren't willing to go through tendering process. They consider it additional hassle," the BoI chief told a seminar in the city.
His comment came in the backdrop of differences between the government and the World Bank over recent amendments to the public procurement act (PPA).
The Bangladesh chapter of International Chamber of Commerce (ICC) organised the seminar to present the findings of a survey on business confidence supported by the International Finance Corporation.
ICC, B president Mahbubur Rahman moderated the seminar. Professor economics of Dhaka University Wahiduddin Mahmud, president of BKMEA Fazlul Haque, chairman of SME Foundation Aftabul Islam, chief executive officer of Bangladesh Foreign Trade Institute MA Taslim, executive director of Policy Research Institute Ahsan H Mansur, chairman of New Age Garments Ltd ASM Quasem, president of DCCI Abul Kasem Khan, and former DCCI president Zafar Osman, among others, spoke at the seminar.
Referring to the extraordinary step by the Philippines' Fidel Ramos's government, the BoI chief said then Filipino president issued an emergency waiver for power generation, allowing foreign investors to bypass the tendering process.
In an oblique reference, Mr Samad said Bangladesh could also attract massive foreign investment in electricity generation in the similar fashion, given the magnitude of the problem.
"We're facing power shortage. This itself offers an opportunity so as the challenge," he said.
"If we can raise our antenna, the nation can be flooded by investments in gas exploration, power generation, coal extraction and LNG," he added, referring to the recent roadshows in multiple foreign cities to draw US$7.0 billion in investments for power projects.
Prof Mahmud, of Dhaka University, also identified energy and power crisis as the key constraint to Bangladesh's growth.
"Unless you address energy and power problems, however business confidence improves, it wouldn't help translate into actual investment and exports," he said.
The IFC survey reveals that investment picked up in the last quarter (Q4) of 2009 and the outlook for Q1 of 2010 is promising. Some 52 per cent of firms invested in Q4 compared to 37 per cent in the previous quarter, showing an improvement in business confidence.
But Prof Mahmud said physical constraints, like electricity shortage, are holding back the country from improving its business climate.
"Use of captive power by businesses is an evidence of loss in business confidence," he added.
He said global recession has started biting the country's exports with showing the sign of clear contraction.
He said foreign investors would flock to Bangladesh if the country is able to win back confidence among domestic investors.
BKMEA president criticised the survey findings, saying it would help little in taking up the business plans as it provided no guideline.
Aftabul Islam was hopeful that roadshows intended to attract foreign investment in power generation have generated enthusiasm and awareness among the international investors' community.
"Now it's the time to get things done in an accelerated way," said Mr Islam.
To foster economic growth, Mahbubur Rahman said the industrial sector will have to account for a karger share of GDP and smooth supply of energy is basic requirement for industrial growth.
He said growing power and energy shortages and poor infrastructure remained a major hurdle to the country’s industrial activities.