Denmark see the IT sector in Bangladesh to have an outstanding advantage

[UNB, Dhaka] Denmark see the IT sector in Bangladesh to have an
outstanding advantage in attracting foreign investment in comparison
with many other competing countries."IT (information technology) in
Bangladesh is a relatively new business, but with an unlimited
potential," Danish Ambassador in Dhaka Einar Hebogard Jensen told UNB.
He said DANIDA's Business to Business (B2B) participated in an IT
matchmaking event in February this year bringing a group of eight
Danish IT companies to the SoftExpo. Denmark was declared as the
partner country of SoftExpo 2008. Out of these eight companies, five
were related to software programming, two dealt with graphics and DTP,
and one had expertise in some specialized hardware components. During
the SoftExpo, more than 110 pre-arranged contact meetings between
Danish companies and Bangladesh partners were held.
The Ambassador said the Danish participants all expressed that quality
of the Bangladeshi partners they had teamed up with during the
matchmaking sessions has been very impressive and satisfactory. He
said it is believed that a number of new alliances and long-term
cooperation would grow out of these contact meetings during the next
couple of months.
Jensen said already some of these Danish companies have started their
second visit to Bangladesh.

Bangladesh to enact law on consumer protection

DHAKA, May 23 -- The Bangladeshi caretaker government has completed
all necessary work for enactment of the Consumer Protection
Ordinance-2008 by next month to protect the rights of consumers.

A spokesman of the commerce ministry on Friday said: "We will hold
a high-level inter-ministerial meeting Monday prior to dispatching the
draft of the ordinance to the advisory council for approval."

Earlier, Commerce Adviser Hossain Zillur Rahman said that the
government set June as its latest timeframe for the passage of the
proposed ordinance.

The government stepped up its efforts to formulate the consumer
protection laws amid soaring commodity prices, caused by a global
spike and hoarding by some big traders in the country.

Officials at the commerce ministry said the proposed law would
provide the government the necessary weapons to control "any abnormal
price hike" in the market.

Under the proposed law, there are provisions for at least 20 types
of crimes ranging from hoarding to flouting of packaging rules to
over-pricing a product than its maximum retail price.

A guilty person can be penalized a maximum three years in jail and
200,000 taka (about 2,857 U.S. dollars) in fines under the law.

According to the law, a consumer can file a case with an
arbitration court against any hoarder, adulterer or retailer who is
doing something wrong.

Policy at risk, not politics Govt faces twin thorns

ASHIS CHAKRABARTI

Bengal's panchayat poll results have thrown up fewer surprises than
would immediately strike one. That the CPM would suffer major reverses
and the Trinamul Congress make some gains, especially in Nandigram and
Singur, was always on the cards.

The real surprise is that the Nandigram-Singur wave did not sweep the
Marxists off their feet in larger parts of Bengal. Even so, the
results could mean much trouble for Buddhadeb Bhattacharjee and his
party.

No one can grudge Mamata Banerjee her moments with rasogollas. But,
the sweets notwithstanding, the results could not have come without a
sour taste too. After all, these were no mere Nandigram-Singur
elections.

After she and the CPM had given their customary responses to the
results, they could look at the political map of Bengal and see how
little has changed. There is still the Hooghly river dividing the
areas of influence — the west of the river is CPM territory and the
much smaller part in its east, part of south Bengal, is hers. One has
only to recall the patterns of the last few elections to see how
familiar the picture is.

In fact, the overall Bengal picture — the CPM winning 13 of the 17
zilla parishads — hardly indicates that this is the "beginning of the
CPM's end", as Mamata has put it one more time.

The CPM's critics would actually be disappointed with the results.
These rural polls came at the crest of a wave of protests that
featured issues ranging from the police firing and the Marxists'
terror tactics at Nandigram to the government's bungling of one issue
after another, especially the Rizwanur Rahman case, and the CPM's
isolation from its partners and Left liberals.

Also, between Nandigram and Rizwanur, the anti-CPM mood swayed
Bengal's large Muslim masses as on few occasions before.

Rarely in recent decades has Bengal seen such long and bitter spells
of popular protests against the CPM. If Mamata and other opponents of
the CPM have failed to make big benefits from this political upheaval
beyond East Midnapore (courtesy Nandigram), Singur, South 24-Parganas
and North Dinajpur (courtesy a new star on the horizon called Deepa
Das Munshi), it does not spell very high hopes for the coming collapse
of the CPM.

That is not to say, though, that the Marxists will be at peace with
these results. They will have much to worry about the spread effect of
these results in terms of space and time. More so because the next big
battle they face — the Lok Sabha polls — is approaching.

The biggest and immediate worry for them, though, may not be the end
of their rule in Bengal and with that their newfound role in Delhi,
but the difficulty Bhattacharjee may face in governance.

Benoy Konar and other CPM leaders who said the results would have no
impact on Bengal's industrialisation were clearly trying to put a
brave face on the Nandigram effect. The chief minister and his party
would know how difficult it would be for them to push the industrial
agenda, at least before the parliamentary polls.

It's not just Mamata who would try and do everything to push her
Nandigram advantage. It is possible that she will move into areas
where land acquisition for new industries has been smooth so far and
raise new battle cries. One such front could be in her newly acquired
South 24-Parganas, where villagers have reached a consensus on giving
their land for a ship-building project.

And, she would be encouraged to open new fronts in places like
Burdwan, where she could take her "not an inch of farmland" cry to
even state projects such as the proposed thermal power plant at Katwa.

Bhattacharjee will also have to face two sets of old adversaries on a
new scale. His critics within the party, some leaders in Bengal and at
the central committee, will now try to tie his hands even more than
they had done before.

He — and the CPM — are sure to be under fresh pressure from parties
like the RSP and the Forward Bloc. These partners have nothing to lose
and much to gain from halting Bhattacharjee's big leap forward for
industrialisation. Such pressures may not be limited to issues of
industrialisation — they will have their impact on other policy
issues, the retail business and private investment in agriculture, for
example.

It would thus be reasonable to expect the political temperature in
Bengal to keep rising till the parliamentary polls. And that could
mean a couple of more bandhs, more violence in the districts and more
of many other things that are no help to industrialisation.

Left loses Nandigram, but keeps Bengal

[Monideepa Banerjie] Panchayat elections in West Bengal are generally
a rough pointer for bigger elections. For the CPM-led Left front there
was good news, and bad news for the Left is that they lost the areas
under turmoil - Nandigram and Singur.

The good news for the Left is that they still hold on to nearly 75 per
cent of the districts in West Bengal.

The final results are the Left front won 13 out of 17 districts,
that's down two districts since the last elections, the Congress holds
on to two districts - same as last time, and the Trinamool is the only
party to better than last time, it won two districts this time
compared to none last time.

So, while the results tend to show that the Left still hold a firm
grip on 75 per cent of Bengal, the focus will be on Nandigram where
even the chief minister admitted that he handled the situation badly.

There were victory celebrations by the Trinamool workers in Singur,
site of the Nano factory. Similar pictures were in Nandigram where the
Left Front had hoped to put up a chemical hub.

At both places the communists have been defeated. In fact, the Left
has lost the entire east Midnapur district where Nandigram is located
and Mamata Banerjee is rubbing it in.

''The government will be changed and it is the people's verdict. This
is the beginning of the end of the CPM party. They should not go for
grabbing the land of the farmers. They should take a lesson,'' said
Mamata Banerji, Leader, Trinamool Congress.

Indeed, making over agricultural land for industry has cost the Left
dearly not only Singur and Nandigram but also the entire South 24
Parganas district.

Buddhadeb Bhattacharya had virtually staked his political fortune on
wooing Ratan Tata and the likes of Indonesian Beni Santoso, promising
the latter swathes of land across south Bengal to build health cities,
knowledge cities and an entire chemical hub.

But all that has backfired. From control of 15 out of 17 districts in
the 2003 polls, the Left's tally is now down to 13.

''We have accepted the verdict of the people. Why the people have
acted or reacted against us we have to go into details of the causes.
Something there is wrong,'' said Benoy Kumar, CPM leader.

It will take at least another two days for the final results of the
panchayat polls to come out. But one thing is clear, Singur and
Nandigram have given the thumbs down to Buddhadeb Bhattacharya's
policy of industrialization even at the cost of agriculture.

At least 20 people were killed in panchayat poll related violence in
West Bengal in the last one week.

Bangladesh: Foreign airlines boost fresh vegetables export

Exports of fruit and vegetables jumped almost 40 percent in the first
nine months of fiscal year 2007-08, spurred by the increased willingness
of foreign airlines to carry fresh produce from Bangladesh. In the nine
months to March 31, exports of perishable agricultural produce rose to
$90.38 million, up 38 percent on the same period a year earlier. The
increase marks a sharp rebound from the performance in 2006-07 when
exports fell.

"It's good that foreign airlines are now willing to carry more, and we
will be able to increase exports even further if we get more air cargo
space," said SM Jahangir Hossain, president of Bangladesh Fruits
Vegetables & Allied Products Exporters' Association (BFVAPEA). Exporters
said foreign airlines such as Qatar Airways, Gulf Air, Kuwait Airways
and Emirates, previously reluctant to carry perishable products such as
vegetables, have been carrying more and helping them accelerate exports.

Increased carrying of perishable products by foreign carriers has also
helped to reduce the pressure on Biman Bangladesh Airlines. Biman now
carries about 60 percent of total agri-products, down from 80 percent, a
Biman official said. SM Masum, reservation executive of Qatar Airways in
Dhaka, said the airline started carrying more perishable items from the
middle of last year.

"We are carrying about 6 tonnes of perishable products every day.
Previously, we carried about 3 tonnes," he said, adding that the airline
carries these products to London, Qatar, Rome, Frankfurt and Milan. Some
experts said foreign airlines are carrying more perishable products to
make up for a reduction in other business, with garment exporters now
happy to send goods through a more efficient Chittagong port. According
to exporters, about 40 categories of products are exported through air
routes with bitter gourd, bean, green chilli, potato, papaya, jackfruit
and mango dominating the overall basket.

Non-resident Bangladeshis as well as expatriate workers, living in high
numbers in Saudi Arabia, United Arab Emirates and United Kingdom, are
the main consumers of local agri-products. Bangladesh's products are
also being exported to Italy, Germany, France, Kuwait and Qatar. "India
is our main competitor. If we are to compete with Indian products, the
government should provide subsidy in freight charges to boost exports,"
said Mohammed Monsur, owner of one of the biggest exporters, Monsur
General Trading Company.

Monsur also said a central warehouse for agricultural products having
facilities such as pre-cooling, packaging system. At present, the
exporters get 20 percent cash incentive based on free on board value.
But exporters said it is insignificant, as they have to pay 75 percent
of their earnings as freight charges. Economists attributed the growth
as a positive sign but said the benefit of export earnings should go to
farmers and not to the middlemen.

"It should bring positive results. But we need to examine how much of
benefit our farmers are getting from the growth," said M Asaduzzaman,
research director of Bangladesh Institute of Development Studies.

Bangladesh economy can grow 7pc or more

The Asian Development Bank (ADB) country director in Dhaka has said
Bangladesh has the potential to achieve 7 percent or more economic
growth a year, despite challenges of political uncertainty, weak
infrastructure and vulnerability to natural disaster.

"Political stability is fundamental for economic growth and the economy
will not be sustained without a stable political base," Hua Du told a
press briefing yesterday while releasing the Bangladesh Quarterly
Economic Update March 2008.

Hua Du is leaving next month after ending her four-year tenure as the
ADB country director in Bangladesh.

The Quarterly report identified weak infrastructure, including serious
power shortages, as serious obstacle to the country's economic growth
apart from political uncertainty leading up to the December 2008
elections. Oil and food grain prices increase in the international
market also posed significant risks, it said.

The report said Bangladesh's GDP is expected to grow by 6 percent in
FY2008, down from 6.5 percent in FY2007 because of moderate agriculture
growth following the extensive flooding and cyclone.

It said fear and uncertainty among the investor community, apparently
created by the government's comprehensive anticorruption drives, have
started to ease.

The ADB quarterly said a major global report (by the
PricewaterhouseCoopers) identified 13 emerging economies, including
Argentina, Bangladesh, Egypt, Iran, Malaysia, Nigeria, Pakistan, the
Philippines, Poland, Saudi Arabia, South Africa, Thailand and Vietnam,
as having the potential to grow faster.

The report concludes that long-term prospects of these countries are
upbeat in addition to major emerging economies including Brazil, India,
Indonesia, Mexico, China, Russia and Turkey.

The global centre for economic activity is already shifting to India,
China and other large emerging economies, and Bangladesh must make all
efforts to capitalise on its comparative advantages to benefit from this
global paradigm shift, said the report.

On food price shocks in Bangladesh, the ADB report said market surplus
of available food grains is estimated at 3.6 million tonnes in Fy2008.

The ADB observed that although domestic food grain prices are expected
to moderate somewhat, high food prices are expected to persist in the
foreseeable future. "Despite a bumper boro crop, risks of a supply
shortage are possible if the next aman and boro crops are affected by
natural disasters or other factors," it said.

"In that case, the shortfall will have to be offset by buffer stocks
through higher imports," the report said.

Rapidly growing prices of food, mainly rice, seriously curtailed the
purchasing capacity of the people living below the poverty line and the
government employees, industrial workers and others with fixed income.

The focus of policy responses should be on targeted interventions to
protect the poor and vulnerable in the face of rising food prices, the
report remarked.

When asked about her experiences in Bangladesh in the last four years,
Hua Du said Bangladesh people's hard work, friendly attitude and
hospitability attracted her most.

"I have also noticed people's resilience here, specially the way they
recovered from natural disaster is simply remarkable," she said.

She also suggested the government focus on governance issues for
country's development. "Governance is also related to the improvement in
efficiency," she added.

West Bengal: Allies shed each other's blood, violent poll but not as bad as 2003

[In the picture: The daughter of a slain RSP leader grieves over his
body in Basanti. Picture by Sanat Kumar Sinha]

May 14: Growing tension between the RSP and the CPM over the past few
months today culminated in the death of four supporters of the two
parties during the panchayat polls in Basanti, South 24-Parganas.

Seven persons have been killed in poll-related violence since last
night.

Eighteen people were killed on a single day of polling in 2003. However,
the deaths five years ago were not in clashes between two Left Front
partners.

Around 10.30am today, three RSP supporters, including a woman, were
allegedly chased by CPM men when they were about to enter a polling
booth in the Talda village panchayat area, 90km from Calcutta.

The RSP trio were yards away from their homes when they were fired at.

Madhusudan Halder, 23, son of RSP candidate Rampada, Kanak Sardar, 32,
daughter of RSP leader Palan Halder, and Palan's brother Ramkrishna, 58,
died.

Police said a dozen RSP supporters suffered bullet and bomb injuries.
They have been admitted to the Basanti block health centre.

The houses of Palan, Mangal Halder and Nimai Halder were looted and
torched.

CPM activist Atiar Sheikh, 50, was hacked to death and bombed.

The CPM and the RSP had been engaged in a fierce turf war in the Basanti
and Gosaba areas of South-24 Parganas in the run-up to the polls.
Several top RSP leaders had visited Talda in the past few days and
exhorted party activists "not to allow CPM any ground in Basanti and its
adjoining areas''.

The RSP, which has been critical of the CPM-led government's move to
acquire farmland for industries, had failed to arrive at a seat-sharing
deal with the partner.

In the last elections, the two parties had no understanding in 80 per
cent of the seats. This time, there were differences over 85 per cent of
them.

RSP leader and irrigation minister Subhas Naskar alleged that Basanti
police station had not taken any step despite being told earlier to
deploy more policemen and make preventive arrests.

After today's flare-up, a large contingent of police, Rapid Action Force
and Border Security Force personnel were deployed in the village.

Chief minister Buddhadeb Bhattacharjee called up PWD minister and senior
RSP leader Kshiti Goswami to say he was deeply concerned at the loss of
lives and urged for talks. "The incident is really unfortunate and
shouldn't have happened. I am sending more forces to Basanti tonight as
there is a chance of retaliatory action. I want to request you to ask
your party men to sit with our supporters and work out a solution. The
home secretary is here. Please talk to him," the chief minister was
quoted as telling Goswami.

Goswami told the chief minister his party had demanded the deployment of
the paramilitary in Basanti for the polls. "It was not done."

Two CPM workers died last night while making bombs in Shantipur village
in Nadia and a Congress supporter was killed by a bomb hurled at him in
Howrah's Domjur.

The first phase of the polls, on Sunday, had no casualties.

In 2005, 10 persons died in Murshidabad, where the CPM and the Congress
clashed. In Canning and Kultali - in South 24-Parganas - a CPM duo died
in an SUCI attack.

Home secretary Asok Mohan Chakrabarti said tonight that the government
would probe why the violence erupted in Basanti despite "sufficient
deployment of armed forces".

District police chief Praveen Kumar said 10 people, including three
policemen, were injured in Bishnupur, Budge Budge and Baruipur.

Four Trinamul Congress activists from Bishnupur were hospitalised in
Calcutta with bullet injuries.

The election commission said polling was suspended in 33 booths,
including 15 in Basanti following violence and allegations of booth
jamming and ballot-paper snatching.

Bangladesh dives into world ship-export market

Bangladesh has started exporting ships to the world market with Ananda
Shipyard and Slipways formally handing over a ship to Denmark's Stella
Shipping.

Commerce adviser Hossain Zillur Rahman was the chief guest at the
handover ceremony at Ananda Shipyard at Meghnaghat in Narayanganj
Thursday.

"It is a historic moment. With this, the door to a tremendous potential
has opened. Ship building is a new area, and through it, an example of
export diversification has been created."

Rahman and Ananda Group chairman Abdullahel Bari handed over the ship
"Stella Maris", with a 3,000-ton carrying capacity and built at a cost
of Tk 45 crore.

Danish ambassador to Bangladesh Einar H Jensen and Stella Shipping
chairman Jan Fabricus received the ship.

Rahman said: "Today Bangladesh enters the 400 billion dollar world ship
exporting market."

"There is a possibility of Bangladesh becoming a global leader in this
sector as different countries including Singapore, China and Japan are
moving away from building small and medium ships," the adviser said.

"The government has realised the potential in this sector and extended
its cooperation. It is being considered a priority sector."

Ananda Shipyard has received orders for 24 ships for export, with their
value amounting to Tk 1,500 crore.

Of the ships, four will be exported to Denmark, 14 to Germany, and six
to Mozambique.

Ananda Group managing director Afruza Bari told bdnews24.com:
"Government-owned Basic Bank has provided assistance in building the Tk
45 crore Stella Maris."

Islami Bank is providing financial assistance in building eight other
ships, including Stella Moon.

Islami Bank has already given Tk 580 crore loans and Basic Bank Tk 110
crore to Ananda Shipyard.

"Islami Bank has pledged to provide Tk 6,600 crore loan in this sector,"
she said.

Ananda Shipyard signed an agreement with Stella Shipping in 2005 on ship
exports.

Afruza Bari said the building of Stella Maris took a little longer due
to the delay in arrival of different equipment.

"If it could be built in one year, the ship building industry would be
more profitable," she added.

Industry secretary Md Nurul Amin, Islami Bank executive chairman Mominul
Islam Patwari, former BUET vice chancellor MH Khan and managing director
of BASIC Bank AH Iqbal Hossain were present at the handover ceremony.

Ananda started ship building in Bangladesh in 1985.

Bangladesh Navy test-fires missile in Bay

Bangladesh Navy has test-fired a C-802 missile in the deep Bay of
Bengal, the Inter-Service Public Relations Directorate said in a
statement Monday, reports bdnews24.com.

This marks the upgrading of Bangladesh's missile system with a Chinese
technical team.

The C-802 is a software-based third-generation missile capable of
destroying any target within 120km, the ISPR statement said.

The naval chief, vice-admiral Sarwar Jahan Nizam, said the successful
test-firing of the missile is a milestone in Bangladesh's naval history.

Bangladesh Elected To Three U.N. Bodies

Dhaka, Bangladesh - The Economic and Social Council of the United
Nations has elected Bangladesh to serve on three prestigious bodies, a
Foreign Ministry spokesman announced in the capital, Dhaka on Sunday.

The bodies are: Commission on Population and Development for a four-year
term (2009-2013), executive board of UNICEF for a three- year term
(2009-2012) and governing council of UN-HABITAT for a four-year term
(2009-2013), according to the spokesman.

Foreign Advisor of Bangladesh Dr. Iftekhar Ahmed Chowdhury was happy
over the the news.

"We are pleased with this since it reflects international acknowledgment
of Bangladesh's key role on economic and social issues. This can be seen
as a foreign policy achievement," Chowdhury said.

BD Govt to reward 'friends of Bangladesh' to Kennedy & WB

Govt to reward 'friends of Bangladesh'
WB, US senator Kennedy among initial choices
Special Correspondent

The government is planning to reward foreign nationals and global
institutions for their outstanding contributions to 12 areas like
foreign aid, exports and 1971 War of Independence, official sources
said.

A draft prepared by the foreign ministry in this connection has been
sent to different ministries for observations, they said.
The Chief Adviser's Office has asked the foreign ministry to go ahead
with the plan and the Cabinet Division has distributed the draft to
different ministries including finance, liberation war affairs and
expatriate welfare and overseas employment.
The number of rewards to be announced sometime in 2008 for every
calendar year has not yet been finalised, sources said.
But the World Bank and US senator Edward Kennedy are two initial
choices of the government for the awards and 'Friends of Bangladesh'
tags, sources in the government hinted.
Foreign adviser Iftekhar Ahmed Chowdhury has already proposed the
name of Kennedy to chief adviser Fakhruddin Ahmed, while the name of WB
has been referred by many in the government.
'We cannot reward Kennedy straightaway in the absence of any
regulation in this regard,' a high official in the Chief Adviser's
Office told New Age.
Senator Kennedy has been chosen for his role in Bangladesh's
independence war in 1971.
The choice of the WB has been made in recognition of the global
lender's supports for the country's economy and development for decades,
officials said.
The rewards have been planned to appease influential foreign
countries and multilateral lending agencies, which extend unequivocal
supports to the interim administration, insiders believed.
The recipient foreign nationals or entities will be labelled as
'friends of Bangladesh,' and each of the awards will carry a letter of
honour, a gold medal and $5,000 in cash, according to the draft.
Contributions to liberation war, socio-economic development, positive
image building, global recognition of February 21, protection of
national interests, conservation of nature and environment, democracy,
social reforms and human resource development will be assessed, among
other areas, for the awards.
Besides, supports for women, children, handicapped and
underprivileged segments, literature, art and technology and expatriate
Bangladeshis will also be considered.
Foreign aid and grant, debt waiver and export earnings are also among
the major yardsticks of the planned scheme to reward foreigners for
their role in various development sectors.

Bangladesh central bank sees growth as high as 6.2 pct

Bangladesh central bank sees growth as high as 6.2 pct
Thu May 1, 2008

DHAKA, May 1 (Reuters) - Bangladesh's central bank said the economy
could grow as much as 6.2 percent in the current fiscal year, supported
by a rebound in agricultural output following natural disasters and a
pick up in exports growth.

"The overall GDP (gross domestic product) will probably grow at a rate
between 6 and 6.2 percent in the fiscal year of 2008 (July-June)," the
central bank said in its latest report released late on Wednesday.

The forecast is a modest change to the central bank's recent comments
when it had said growth would be 6 percent. The government has forecast
growth at 7 percent.

However, the central bank remained wary of inflation, which rose in
March on an annual average basis to 10 percent, the authority's chief
economist said.

"Failure to contain high inflationary pressure; electricity, gas,
transport and other infrastructure constraints adversely affecting the
country's productive performance; persistence of high and rising
petroleum and food prices in the global market are major impediments to
achieve higher growth," the report said.

Mustafa K Mujeri, the central bank's chief economist, said the farming
sector was recovering from floods and Cyclone Sidr that struck last
November.

"We were concerned growth might slow because of repeated floods and Sidr
in 2007 which destroyed more than 2 million tonnes of rice and damaged
infrastructure in rural areas," he said.

Bangladesh expects to harvest 17.5 million tonnes of boro rice, a major
crop, 17 percent higher than last year.

The report also said exports growth had picked up, which would help
support economic momentum. Exports in the first eight months of the
fiscal year rose 11.3 percent compared with the same year-earlier
period, picking up from single digit percentage in increases in the data
for the first five, six and seven months.

The agriculture sector may grow up to 2.5 percent in the current fiscal,
while the services sector grow up to 6.3 per cent.

Industrial sector may grow between 8.5 percent and 8.7 percent in the
fiscal year to end of June, 2008.

"Our efforts to contain high inflation will continue so that its
pressure on the economy does not affect common people," the economist
said. ($1=68.58 taka) (Reporting by Serajul Islam Quadir; editing by
Neil Fullick)

Indian Ship-breakers lose business to Bangladesh

Indian Ship-breakers lose business to Bangladesh

Bijith R / New Delhi May 02, 2008


With Bangladeshi ship-breakers offering around 23 per cent more for
steel scrap than India, Indian ship-breakers are in trouble and some of
them may have to close shop. Bangladeshi companies are offering Rs
29,600 per tonne for scrap steel compared with Rs 24,000 per tonne that
the Indian players are paying.

Bangladesh has emerged as a major ship-breaking destination in South
Asia with an average of 150-200 vessels being scrapped there every year.

Pakistan, on its part, is competing with India by scrapping an average
of 70-90 vessels in a year compared with India's 120. Pakistan is
offering around about 5 per cent more for steel scrap than India.

Both India and Pakistan generate around 4,000 tonnes of scrap steel per
vessel, much less than Bangladesh, which generates 12,000-15,000 tonnes
of scrap steel per vessel. Bangladesh can offer higher prices as most
steel manufactured there has scrap as the basic raw material.

Nikhil Gupta, joint secretary, Ship Recycling Industries Association of
India, said, "One reason why Bangladesh is offering more is because it
doesn't have any other major source for making steel.

For that, it has kept the duties low. Because of this, Bangladesh has
managed to attract high-tonnage vessels. Neglected vessels with lesser
tonnage make their way to yards in India or Pakistan. Now with Pakistan
offering a higher price, it is in a better position to attract more
vessels".

Gupta says their business is going through a lean phase. Between 1995
and 2001, the industry employed over 45,000 people per annum, which has
now come down to 6,000.

Industry experts say in the last five years, because of the boom in the
shipping industry, a number of old vessels have been overstretched. Due
to global economic slowdown, freight rates are correcting and with
global steel prices ruling higher, shipping companies will be able to
command more for their scrap vessels, they say.

However, Indian ship-breakers hope the tide will turn in 2010, when the
International Maritime Organisation comes with guidelines on
ship-breaking norms. Many Bangladeshi ship-breaking yards will have to
close down over pollution and labour issues, experts say.