Despite the slow disbursement of funds in ongoing China-funded projects within the country, another Chinese company has now presented a substantial investment proposition amounting to around Tk1 lakh crore or around $9 billion for two mega projects.
During the visit of Chinese President Xi Jinping to Bangladesh in 2016, an MoU for 27 projects worth about $20 billion was signed. Loan agreement was signed for nine of the projects worth $8.08 billion, out of which only $4.47 billion has been disbursed till 30 June 2023.
Now, China Road and Bridge Corporation (CRBC), an engineering and construction company based in Beijing, has come up with this huge investment proposal to develop two innovative smart cities in Keraniganj and Ashulia.
Out of the proposed investment, Tk52,000 crore has been estimated for the Waterfront Smart City Project in Keraniganj, adjacent to the Dhaka-Mawa expressway.
Additionally, Tk47,000 crore has been proposed for the Conservation of Flood Flow Zone of Turag River and Compact Township Development Project in Ashulia.
The feasibility study and comprehensive environmental survey for both of these projects have already been completed with the funding of CRBC, sources say.
Experts say the Chinese company has already secured the contract for constructing the Chinese Economic Zone in Anwara, Chattogram. If the company also gets the contracts for the mega projects in Keraniganj and Turag, it could potentially lead to project delays.
They also raised questions about the credibility of having the investing company itself conduct the feasibility study for the projects.
Zahid Hussain, former lead economist of the World Bank's Dhaka office, told The Business Standard, that if the project is implemented through CRBC's financing based on the feasibility study conducted by them, the entire liability will later fall on the government, which will not be a good position to be in.
He highlighted that mega projects of this nature should ideally be carried out by a company selected through a transparent tender process, backed by an independent feasibility study. This approach would ensure a more rational assessment.
"When the feasibility study is conducted by parties invested in both financing and execution, there exists a risk that if the study does not portray the project as financially viable, it might not proceed. In such a scenario, the absence of a project could result in a lack of work opportunities. This situation could potentially lead to a feasibility study being influenced by future contract considerations," he said.
Officials said the Keraniganj project, situated adjacent to Rajuk's Jhilmil Project along the Dhaka-Mawa expressway, will encompass an expansive area of around 5,019 acres.
On the other hand, the Turag project occupies a strategic position within the catchment region of the Turag River, encompassing a sprawling area of 9,519 acres.
Both of these projects will be implemented in four phases.
The total expenditure for the 15-year implementation of the Keraniganj project has been projected at Tk52,000 crore. Within this allocation, land acquisition is estimated to consume Tk7,000 crore, while the subsequent land development phase is expected to cost Tk17,000 crore. The proposed smart city will have small apartments developed for low-income people.
Conversely, the Turag project is primarily conceived to safeguard the flood flow region, with a substantial 62% of the space designated for water bodies preservation. Within the remaining 38% of the area, Rajuk is slated to establish a condensed township, of which 8% will be allocated as green space.
The remaining 30% will accommodate the creation of residential and commercial structures, along with additional recreational amenities. The anticipated implementation cost for this project is estimated at Tk47,000 crore.
On 25 July, an inter-ministerial meeting was held in this regard with the participation of officials from the finance division, housing and public works ministry, Rajdhani Unnyayan Kartripakkha (Rajuk), Economic Relations Division, and representatives from the Chinese company.
During this meeting, CRBC presented a comprehensive investment framework agreement designed for the execution of the two ambitious projects.
Within the proposal, a range of six different models, in accordance with the legal framework of Bangladesh, were suggested. These models encompass various approaches such as Government-to-Government (G2G), Public-Private Partnership (PPP), and joint ventures, said sources involved in the meeting.
An inter-ministerial committee has also been formed led by Sayed Mamunul Alam, additional secretary (Development-1) of the Ministry of Housing and Public Works to review the CRBC Investment Framework Agreement proposal. The committee will review CRBC's proposal and submit a report within the next month.
Sayed Mamunul Alam told The Business Standard that a committee meeting had taken place, and several more such meetings are scheduled. "However, as of now, there has not been any significant progress to report regarding these two projects."
He added, "Rajuk is ready to spearhead their implementation of the projects."
Back in 2019, a memorandum of understanding (MoU) was signed between Rajuk and the Chinese company to initiate the feasibility studies for these two projects. The comprehensive feasibility and environmental assessments for both endeavours have already been concluded.
On 10 July this year, a presentation based on the Environmental Impact Assessment Report was delivered, gaining the approval of the Department of Environment.
In 2019, when Rajuk entered into an MoU with CRBC to evaluate the feasibility of the two proposed projects, it faced opposition from several environmental groups.
The groups expressed concerns that the execution of these projects could lead to the filling up of water reservoirs and a reduction in open spaces, thereby potentially resulting in significant adverse environmental consequences.
On 25 May 2022, the Ministry of Housing and Public Works along with Rajuk delivered a presentation on the two prospective projects to Prime Minister Sheikh Hasina at the Ganabhaban.
The prime minister directed that the projects be implemented with due regard to all environmental issues.