Lack of policy support hinders growth of local power tower making industry
Thursday, 8 November 2007
S M Jahangir
The lack of necessary policy support from the government has been impeding the growth of the local power transmission tower production units.
The sector has already developed its export capacity after meeting the country's growing demand for electricity transmission towers provided necessary policy support is ensured by the government, the industry insiders said.
But, the existing policy support of the government is holding back the sector's growth prospect, they observed.
Terming an uneven playing field as a major obstacle to the growth of local tower industry, the manufacturers said they are unable to compete with the importers due to the government's existing 'inappropriate' duty structure.
The local manufacturers are to count at least 43 per cent as customs duties, VAT and other duties for importing raw materials while only 5.0 per cent duty is applicable for imported towers used by the state-owned power agencies, including the Power Grid Company of Bangladesh (PGCB).
Due to the prevailing uneven duty structure, the manufacturing costs of local transmission towers go up significantly.
Against this backdrop, local tower makers find themselves in a difficult situation to compete in the government's bidding process for supplying power transmission towers, said Imran Karim, a director of the Confidence Steel Limited (CSL).
Considering the situation, he urged the government to review the duty structure for creating a level-playing field and ensure the growth of the local tower manufacturing industry.
He further said apart from the unequal customs duties, the existing bidding criteria are also limiting the participation of local tower manufacturers in the government's tender process.
"Under the existing provision, a company requires to have at least five years experience in the manufacturing of such towers for participating in the official bids, which the local manufacturers do not," Imran said.
He emphasised the urgent need for relaxing the said provision to facilitate the participation of local tower makers in the government's bidding process.
He said the PGCB install about 400 kilometres of power transmission lines per year and the local manufactures are able to do it.
Apart from the CSL, two other companies also manufacture steel-made power transmission towers in Bangladesh, Imran mentioned.
"Our state-of-the-art factory, which is able to make world class power transmission towers, is ready to enter the export markets if the government provide necessary policy supports," he said.
The 25,000-tonne capacity CSL has already made a breakthrough in the manufacturing and supplying of telecommunication towers at the local level, he said, adding that it had already delivered over 1400 towers to the local mobile phone operators.
Imran, however, demanded of the government to provide cash subsidy on exports of both telecom and power transmission towers, recognising the industry as a 'thrust sector'.
Bangladesh can fetch huge foreign currency by exporting both types of towers to many countries, including the Middle East and European markets, he added.
The lack of necessary policy support from the government has been impeding the growth of the local power transmission tower production units.
The sector has already developed its export capacity after meeting the country's growing demand for electricity transmission towers provided necessary policy support is ensured by the government, the industry insiders said.
But, the existing policy support of the government is holding back the sector's growth prospect, they observed.
Terming an uneven playing field as a major obstacle to the growth of local tower industry, the manufacturers said they are unable to compete with the importers due to the government's existing 'inappropriate' duty structure.
The local manufacturers are to count at least 43 per cent as customs duties, VAT and other duties for importing raw materials while only 5.0 per cent duty is applicable for imported towers used by the state-owned power agencies, including the Power Grid Company of Bangladesh (PGCB).
Due to the prevailing uneven duty structure, the manufacturing costs of local transmission towers go up significantly.
Against this backdrop, local tower makers find themselves in a difficult situation to compete in the government's bidding process for supplying power transmission towers, said Imran Karim, a director of the Confidence Steel Limited (CSL).
Considering the situation, he urged the government to review the duty structure for creating a level-playing field and ensure the growth of the local tower manufacturing industry.
He further said apart from the unequal customs duties, the existing bidding criteria are also limiting the participation of local tower manufacturers in the government's tender process.
"Under the existing provision, a company requires to have at least five years experience in the manufacturing of such towers for participating in the official bids, which the local manufacturers do not," Imran said.
He emphasised the urgent need for relaxing the said provision to facilitate the participation of local tower makers in the government's bidding process.
He said the PGCB install about 400 kilometres of power transmission lines per year and the local manufactures are able to do it.
Apart from the CSL, two other companies also manufacture steel-made power transmission towers in Bangladesh, Imran mentioned.
"Our state-of-the-art factory, which is able to make world class power transmission towers, is ready to enter the export markets if the government provide necessary policy supports," he said.
The 25,000-tonne capacity CSL has already made a breakthrough in the manufacturing and supplying of telecommunication towers at the local level, he said, adding that it had already delivered over 1400 towers to the local mobile phone operators.
Imran, however, demanded of the government to provide cash subsidy on exports of both telecom and power transmission towers, recognising the industry as a 'thrust sector'.
Bangladesh can fetch huge foreign currency by exporting both types of towers to many countries, including the Middle East and European markets, he added.