Second bridge over Padma endorsed, draft industrial policy sent back
Govt to examine Coca-Cola investment proposal, appoints designer for Dhaka elevated expressway

FE Report

The cabinet committee on economic affairs Thursday endorsed a plan to construct another bridge over the river Padma but sent back an upgraded industrial policy on grounds that it overlooked key issues affecting new plants and taxation in the country.

Finance minister AMA Muhith who heads the key cabinet body said the work of the second bridge would began "as soon as possible" after the government starts construction of 6.15 kilometre road-cum-rail bridge over the same river from later this year.

The bridge will be built between Paturia and Daulatdia - the route that connects the capital with the southwestern districts and it "will not be a multipurpose bridge", meaning there will be no rail or gas pipeline, he said.

"The total financing of the bridge will come from the private sector," he said, amid reports that the leading development donors, the World Bank and the Asian Development Bank, have shied away from financing the infrastructure.

The minister said the government would conduct a quick feasibility study of the new bridge, which would give a "clear picture" of the financing need for the project.

The cabinet committee, which also includes top ministers for industries, communications and commerce, sent back an upgraded edition of industrial policy for the next three years.

The new draft being formulated by the industries ministry lacked proper policy guidelines on future status of tax breaks enjoyed by green-field plants, land-use by factories and small and medium enterprises, Muhith said.

"We don't agree with the tax exemptions proposed by the draft policy. It should be amended," Muhith said, hinting a rollover of the decade-long government policy to offer years of tax breaks to new industries.

The finance minister said the new policy also entirely missed any guiding principle on maximum utilisation of land by the plants.

"Land is shrinking fast in the country. It becomes dearer for setting up new factories and it should be properly utilised," he said.

The meeting formed a committee headed by Executive Chairman of Board of Investment Dr SA Samad for further revision of the draft, Muhith said.

"We held threadbare discussions and decided that some of the chapters of the policy should be revised," he said.

Dr Samad, in consultation with the ministries of industries, finance and commerce, will submit the revised draft before the cabinet committee, he added.

"Small and medium enterprises are the growth engine of our economy and the policy should have elaborate guidelines on the sector," he said, adding it should also highlight strategies on how state-owned enterprises (SoEs) would become profitable.

The industrial policy should be aligned with the charter of the World Trade Organisation (WTO) and have clear rules and regulations on the environmental impact of the plants.

The committee also discussed a proposal by global soft drink giant Coca-Cola to set up a bottling plant, catering to the demand in the country's central and northwest regions.

Muhith said a high-powered body led by prime minister's economic advisor Dr Mashiur Rahman would scrutinise Coca-Cola's proposal as the American company has reportedly sought government investment for the new plant.

The manufacturer of Coke, Sprite and Fanta had cut a bottling and marketing contract with state-owned bottler Tabani Beverage in 2008 and was looking to revitalise production through the new venture, expected to cost over $50 million.

"The committee will look after several issues including how much share the government will get in the new investment and if the freedom fighters will get any benefit from the company," the minister added.

Coke has already snapped up its business ties with Tabani Beverage - a venture run by the government's Freedom Fighters Welfare Council -- and it will be completely a new investment, he said.

"The committee will re-examine the relations between the old investment and the new one," the minister said.

During the four-hour long meeting, the cabinet committee also approved the appointment of a designer for construction of an elevated expressway in the capital.

The communication ministry sought permission to appoint a New Zealand firm that designed the Padma Bridge for designing the key expressway project that would ease congestion in Dhaka.

The committee approved the proposal as the firm could complete the task in three months, Mr Muhith said, adding, "Any other company would have taken at least six months to complete design," he added.

The committee asked the ministry of communication to formulate a 'toll road' policy as soon as possible, the minister said.

It also decided to build the Mymensingh-Joydevpur road on the basis of private-public partnership (PPP), to be financed by tolls, he added.