25
August 2005 at 1500 hrs at UTC Convention Hall, Panthapath.
Mr. Chairman,
Distinguished Guest,
Ladies and Gentleman,
Good Afternoon!
I am pleased to be here with you at the launching
of the Chinese translation of the book, "Financing
Large Projects", by M. Fouzul Kabir Khan, Executive
Director and CEO, IDCOL, and Robert J. Parra, Director,
PricewaterhouseCoopers Securities.
Being
a part of the business community for a considerable
length of time, it has occurred to me that following
the liberation of Bangladesh as an independent country,
potential businessmen and those who were part of different
development sectors, did not have access to information
which would guide them through the various stages
of project development cycles. I always felt that
a knowledge-base is required regarding the design
of contractual arrangements to support project financing;
issues for the host government legislative provisions,
public/private infrastructure partnerships, public/private
financing structures; credit requirements of lenders
and mechanism to assess project's borrowing capacity
and to prepare cash flow projections and use them
to measure expected rates of return; tax and accounting
considerations; and analytical techniques to validate
the project's feasibility. But, at present, the industrial
segment of the economy has undergone various changes
as businessmen have the opportunity to further augment
and enrich their knowledge, professional skills by
referring to numerous finance related books and resources,
one such being, "Financing Large Projects".
Ladies
and Gentlemen,
Globalization
is increasing the minimum efficient scale for many
industries, thereby forcing firms to make larger and
riskier capital commitments. And the depletion of
existing natural resources means firms will have to
develop resources in increasingly remote locations
subject to higher levels of sovereign risk. But it
is also a fact that the combination of privatization
and deregulation of key industrial sectors (e.g.,
telecommunications, power, water, etc.) will create
new investment opportunities, not to mention lessons
on what kinds of businesses should and should not
be managed by the private sector. Demand for investment
in infrastructure is especially high in developing
countries. According to the World Bank studies, Asia
alone needs $2 trillion of infrastructure investment
over the next ten years to maintain its current standard
of living. Yet most developing countries lack the
necessary capital and have little ability to borrow.
The only way to fund much of this investment will
be through project finance.
Project
financing is an important academic discipline and
has significant practical applications. It is particularly
important for a developing and growing economy like
Bangladesh as our development activities involve financing
large projects. So far books on project financing
tended to be finance-centred or it is a study on conditionalities
and processes. A comprehensive study on all of its
aspects has been lacking.
"Financing
Large Projects", a book by Dr. Fouzul Kabir Khan
and Robert J. Parra, therefore, has been a welcome
addition to fill this gap. It is a comprehensive book
on the art of project financing explaining the various
principles involved. It elaborates and simplifies
the concepts as well as their applications. The book
provided a lucid explanation of the intricacies of
International law as it impinges on project finance.
The book is particularly thorough in explaining the
criteria used particularly by bankers and lawyers
to weigh the bank-ability of a project. However, I
would like to emphasise on one aspect of financing.
I think financing should be done more on the basis
of merit of the project rather than the quality or
worth of the collateral financing which falters more
often than not. Be it structured or not, financing
should ideally keep space for the consideration of
social return likewise the economic ones.
As a developing economy, financing of large projects
whether public or private - is naturally a prime concern.
The Chinese translation of the book will certainly
contribute largely to a better understanding of the
challenges we face in Bangladesh in matters of financing
of projects.
Government
officials in the relevant departments would find the
publication useful on many counts, including for evaluation
and assessment of projects. They would find useful
inputs on considering waiver of sovereign immunity,
payment guarantee, fiscal incentives, guarantee of
availability and transfer of foreign exchange and
assurance that the project will not be confiscated,
expropriated or nationalized.
Ladies and gentlemen,
The
Chinese translation of the book can truly mark a significant
step towards the global platform, as it would enhance
the bilateral exchange of views between Bangladesh
and China. Bangladesh and China are bound since ancient
times in age-old ties forged by great Chinese travelers
like It Sing, Fa Hien and Hieun Tsang from China and
Atisha Dipankar Srijnan, the most outstanding of saint-scholar
from ancient Bangladesh. Atish Dipankar has been credited
for spreading Buddhism in Tibet by translating over
two hundred books. He has been acclaimed as the first
person to have translated Bengali to Mandarin. Atish
Dipankar Srijnan's numerous books are still preserved
in the monasteries of Tibet and China as valuable
religious literature while he is venerated as the
Second Buddha with his image still placed in the high
pedestals of monasteries of China and some other countries
in Northern Asia.
Distinguished
Audience,
The
launching of the book comes at a time when we just
returned from China after a very successful visit
of Honorable Prime Minister Begum Khaleda Zia to Beijing.
We believe that the visit has taken Bangladesh-China
relations to a new height and has called for strategic
partnership between the two countries, thereby creating
an integrated supply chain for the global market.
I am confident that the book will attract more and
more readers. I would like to congratulate the authors
for a job well done. I thank the American Alumni Association
for inviting me to this event.
Thank you.
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