(MENAFN - NewsIn.Asia) Dhaka, December 12 (newsin.asia): Japan and Bangladesh have devised a foolproof system to determine and execute investment projects to avoid the flaws seen the China-funded and executed projects in developing countries.
The Bangladeshi paper, The Daily Star, reported on Monday, that Japan is going to invest in Bangladesh's infrastructure projects under a new arrangement in which its companies will work under a government-to-government system without participating in any bidding.
The Land, Infrastructure, Transport and Tourism Ministry of Japan, and the Public Private Partnership Authority (PPPA) of Bangladesh will soon float a joint public private project management platform to this end.
The platform, which will have permanent members from both the countries, will select Japanese companies for implementing projects. It will also mobilize funds and monitor project implementation, authorities of the PPPA said.
The PPP Authority works under the Prime Minister's Office (PMO).
PPP Authority officials could not say how much money would be invested under the new arrangement or how the funds would be mobilized.
Syed Afsor H Uddin, chief executive officer of the PPP Authority, and Yasuki Kaibori, Deputy Minister of Japan's Land, Infrastructure, Transport and Tourism Ministry, had signed a Memorandum of Understanding (MoU) on this in Japan in June this year.
The PPP Authority will first identify infrastructure projects such as highways, ring roads, subways, and economic zones after having discussions with the ministries concerned. The joint management platform will then select a project for implementation. After the selection, the company will carry out a feasibility study. Japanese banks fill arrange the funds for the selected projects.
Japan's Investments So Far
Japan has been providing Bangladesh with nearly US$ 2 billion as soft loans every year since fiscal 2012-13.
Recently, China had pledged around US$ 21.5 billion to Bangladesh for large infrastructure projects which it will China will execute. India has committed around US$ 7 billion. Indian companies will get work through 'selected bidding' (the process by which select contractors are invited to bid). 65 to 75 percent of the materials to be used in Indian projects will be imported from India.
Japan seeks to capitalize on this exclusive government to government arrangement to eventually surpass Chinese investments not only in Bangladesh but in other parts of the developing world.
In 2015, China accounted for 55% of Africa's infrastructure projects, compaared with Japan's 1%. In the Middle East, China had a 17 percent share compared with Japan's less than 2%. The Chinese are ahead in other parts of the world as well, such as Asia, Oceania and Europe.
With many of the Chinese projects delayed or revised, the Japanese government is confident about breaking into overseas construction contracts .
In a policy speech in November, Japanese Prime Minister Shinzo Abe said Japan's infrastructure exports had increased had by 10 trillion Yen (US$ 89 billion) in five years.
Still, the Chinese and South Koreans continue to enjoy pricing and political advantages over Japan.
(The featured picture at the top shows the Bangladeshi Prime Minister Sheikh Hasina and the Japanese PM, Shinzo sharing good vibes)