Bullet train: Japan ahead of India

Japanese steel and engineering companies are in the driver’s seat to bag major supply contracts for a $17 billion Indian bullet train, several sources said, undermining a key component of Prime Minister Narendra Modi’s economic policy — a push to ‘Make in India’.

Japan is funding most of the project, and Japanese companies are likely to supply at least 70% of the core components of the rail line, said five sources in New Delhi with direct knowledge of the matter.

A spokesman for Modi’s office declined comment.

A Japanese transport ministry official involved in the project said the two countries were still working out a strategy for the supply of key components, and would unveil a plan for procurements around July. The official spoke on condition of anonymity.

The September 2017 agreement between Japan and India for the bullet train project included two clauses — the promotion of ‘Make in India’ and ‘Transfer of Technology’ — through which New Delhi had hoped to set up manufacturing facilities in the country, generate jobs and get a toehold in Japanese technology.

Modi faces a general election in 2019 and is under pressure to provide more jobs to millions of unemployed in India. Critics also say the bullet train is wasteful and that the money could be better used elsewhere.

The Japanese have reservations on certain issues because they have a concern that there is a difference in the culture and systems of Japan from the culture and systems in India,” said Achal Khare, the managing director of National High Speed Rail Corp Ltd (NHSRCL), the agency tasked to execute the bullet train project.

The work culture is very different,” he told Reuters.

Khare did not elaborate but two Indian railways officials, who spoke on condition of anonymity, said their Japanese counterparts had raised questions about efficiency in Indian companies and their ability to meet timelines.

The World Bank currently ranks India 100th out of 190 nations on the ease of doing business, giving it relatively low marks for starting a business, enforcing contracts and dealing with construction permits.

Tomoyuki Nakano, director for international engineering affairs in the railway bureau at Japan’s transport ministry, said the issue was that Indian companies had no experience or technologies specialising in high-speed railway systems at present.

I don’t think Japanese are concerned about a difference in the work culture,” Nakano said. and other Japanese officials said efforts were continuing to fulfil the ‘Make in India’ component of the agreement by promoting collaborations between companies from the two countries.

Still, several Indian officials said it was by and large accepted that Indian companies would not have a major part to play in the bullet train project.

Japan will get major leeway because the bullet train is largely funded by a 50-year loan provided by its government, said a close aide of Modi, who spoke on condition of anonymity.

At this stage to expect Indian companies to have a bigger share in manufacturing appears to be a little difficult,” said a senior official at the Indian government’s policy think-tank, NITI Aayog, who is involved in the negotiations.

Modi’s flagship ‘Make in India’ initiative aims to lift the share of manufacturing in India’s $2 trillion economy to 25 percent and create 100 million jobs by 2022.

However, midway through Modi’s five-year term, manufacturing was still at 17% of India’s GDP in the 2016/17 financial year from 15% previously.

Japan’s Prime Minister Shinzo Abe laid the foundation stone for India’s first bullet train in September last year. will link Mumbai with Ahmedabad, the largest commercial city in Modi’s home state Gujarat.

Nippon Steel and Sumitomo Metal Corp , Japan’s biggest steelmaker, and other companies like JFE Holdings, Kawasaki Heavy Industries Ltd, Mitsubishi Heavy Industries Ltd, Toshiba Corp and Hitachi Ltd are likely to bid for various contracts, said three senior Indian government officials directly involved in the project.

Nippon Steel said it would not comment on specific projects.

JFE, Hitachi and Toshiba said they were interested in the project but had not finalised plans, including any possibilities of joint ventures with Indian firms.

Mitsubishi Heavy said it had not decided if it wanted to be involved.

The sole collaboration aimed at the bullet train project is between Kawasaki Heavy Industries and India’s Bharat Heavy Electricals Ltd , which aims to win carriage orders.

Japanese government officials have asked for more bullet train corridors in India before transferring technology, three senior Indian officials said.

But New Delhi is unlikely to announce any new projects until the final cost and commercial feasibility of the Mumbai-Ahmedabad link is clear, the officials said.

It’s like a chicken and egg situation on technology. The Japanese want an economy of scale and business but the Indian view is that India is a big market that once this market is explored the business will automatically be generated,” said Khare from NHSRCL.

New Delhi has tried to help Indian steel companies grab a slice of the pie.

The Indian government last year mediated negotiations between Nippon Steel and India’s Jindal Steel and Power Ltd to set up a joint venture to manufacture rails, but the talks fell through after the Japanese major raised quality concerns, three sources in New Delhi said.

State-owned Steel Authority of India (SAIL), which for decades has been the main supplier of rails to Indian Railways, was also overlooked by Japanese companies due to quality concerns, the sources said.

Nippon Steel declined comment and while Jindal and SAIL did not reply to e-mails seeking comment.

Left with little choice, Indian firms will now largely provide raw materials like cement and supply manpower for the assembly of rails, the sources said.

India’s UltraTech Cement Ltd, Larsen & Toubro Ltd, Bharat Heavy Electricals Ltd and Ambuja Cements Ltd are among those in the race for the supply of construction materials and power, the two Indian railways officials said.

These companies did not respond to Reuters’ requests for comment.


No job for China Harbour in future

No job for China Harbour in future

Finance Minister AMA Muhith yesterday said China Harbour Engineering Company Limited has been blacklisted for offering bribes to government officials and would not get any contracts in the future.

The government will take a decision about the ongoing projects where the Chinese company is involved, he said.

The company had previously got the contract for expansion of the Dhaka-Sylhet Highway.

Muhith was talking to journalists at his secretariat office.

Replying to a question on whether the company was blacklisted, Muhith said, “Blacklisted. Of course.

Queried on whether China Harbour will be able to do other works in Bangladesh, he replied, “No, No. They can't.

Regarding other projects the company is involved in, the finance minister said, “Let's see what can be done. Normal rule is blacklisted means blacklisted.

When asked whether the company offered bribes to government officials to get the contract or to increase amount for work, he said, “They have already got the contract. I think [they offered bribe] only to please [officials] so that they [company] can misappropriate money.

About punishing the officials who were given the bribe, he said, “No, certainly not. Because, they [the company] offered it to the secretary and the secretary gave it to us.

When asked who the secretary is, he replied, “Communication [road transport and bridges ministry] secretary.

Queried about the amount of bribe, the finance minister said, “I forgot the amount. Maybe 50 lakh. He, however, did not mention the currency used.

He also said they were proud of the secretary for his actions.

Contacted, MAN Siddique, who went on leave preparatory to retirement (LPR) as the secretary of Road Transport and Bridges Division last October, said: “This incident did not happen during this tenure. It may [have] happened later.

Declining to give any more details, Siddique said, “You better talk to the incumbent secretary.

The Daily Star could not reach incumbent Secretary Nazrul Islam even after sending texts.

However, sources at the road transport and bridges ministry said China Harbour gave the bribe money “as a gift” to the newly appointed secretary of the ministry in November last year.

The secretary did not receive the money, and the ministry later sent it to the Chinese embassy in Dhaka with a letter, they added.

On Monday, the finance minister had said: “[The expansion of] Dhaka-Sylhet Highway, somehow, we had to drop it. Because, the party who got the contract, they came up, in the very beginning, with offer of bribe, open bribe.

So, we gave the money, which they gave to some of our officials, back to the Chinese embassy and naturally blacklisted the company. The government decided to fund the expansion work of the 226km Dhaka-Sylhet road to a four-lane highway on its own, Muhith said.

Bangladesh and China signed a memorandum of understanding during the Chinese president's visit to Bangladesh in 2016.

Under the deal, China had promised to give soft loans of $21. 5 billion for 26 projects, including the Dhaka-Sylhet four-lane highway project.

China also selected China Harbour Engineering Company Limited for the project and asked Bangladesh to sign a commercial contract with the company.

Soon, the negotiation process started between the company and the Roads and Highways Department (RHD), finance ministry sources said.

Bangladesh estimated Tk 10,000 crore as the cost of the project, but China Harbour demanded near about Tk 20,000 crore, they said.

The Bangladesh government planned to sign loan agreements for eight of the 26 projects with China's Exim Bank within 2017. This project was one of them, but the loan agreement for it was not signed, sources added.

Earlier, the government on October 9, 2016, signed a primary deal with China Harbour. RHD Chief Engineer Ibne Alam Hasan and the company's Vice-President Tang Qiaoliang inked the agreement at a hotel in Dhaka.

On September 21, 2016, the cabinet committee on economic affairs approved RHD's proposal, allowing China Harbour to carry out the project.

China Harbour is one of the few Chinese companies to establish good relations with some local firms and government officials.

Arriving in Bangladesh in early 1990s, this firm now uses its local connections to get projects. It even has the ability to increase costs in the middle of a project's implementation, some contractors and sources in RHD told The Daily Star.

They [China Harbour and their local agents] are smart and well-connected. They can easily reach a minister or an influential figure in the government in a bid to get contracts,” said the owner of one of the country's largest construction firms, requesting anonymity.

He said agents of the companies regularly visit ministries and meet officials. You can also find them at the RHD office, trying to woo officials.

Allegation of bribing Bangladeshi influential people is not new about the Chinese company.

The company had earlier bribed Arafat Rahman Koko, younger son of BNP Chairperson Khaleda Zia, and Ismail Hossain Saimon, son of former shipping minister late Akbar Hossain, to get the construction work of the New Mooring Container Terminal at Chittagong port.

The two were awarded six-year jail for laundering the bribe money to Singapore. The Anti-Corruption Commission later brought back the money.

Additional Chief Engineer of RHD Abul Kashem Bhuiyan, who is involved in Dhaka-Sylhet expansion project, denied any malpractice in the project. It is beyond my knowledge. Nothing like that [bribing] happened here. It may happen somewhere else,” he told this newspaper.

Asked about the local agents of China Harbour, he said the firm has local agents whom he did not know.

According to Kashem, the Chinese firm demanded far more money than what RHD had estimated for the expansion work.

We calculated every cost keeping in mind inflation and price escalation of materials, but the company came up with such a rate that was not acceptable,” he explained.

He said local experts, including a teacher from Buet, was involved in the pricing procedure.

RHD Chief Engineer Alam said he was surprised to know about it and declined to comment.

On February 8 last year, the cabinet committee on economic affairs awarded the Chinese company the job of developing an economic and industrial zone for Chinese investors in Chittagong's Anwara.

On December 8, 2016, China Harbour and another Chinese company entered into preliminary agreements with Bangladesh to develop three components of Payra seaport with $510 million.

On September 21 that year, the cabinet committee again selected China Harbour for implementation of another project, which includes construction of a marine drive and a 160km four-lane expressway and land reclamation from Sitakunda to Cox's Bazar.


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The agency's coordinator Abdul Hannan Khan and co-coordinator Sanaul Huq revealed the information at a press conference at its Dhanmondi office.

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Welcome back birds

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In Atia union of Tangail's Delduar upazila it's noisy nowadays, with the call of birds.

Martins, magpies, doves, pigeons, sparrows, and nightingales: many species that seemed lost to area are returning in numbers, thanks to an environmental initiative by local youths to provide them with earthen pot homes.

Birds are the most beautiful creatures,” says one of the youths involved, Talha Ahmed Saju. But for a variety of reasons including climate change, they are being lost to our environment. Bird numbers are also declining due to loss of suitable roosting sites. We decided to do something about that.

Since last October, Talha and his friends have engaged local potters in making clay homes for the birds. Around 300 pots have already been attached to local trees, with a further 1,500 planned.

Some locals were laughing at our activities in the beginning,” says Shariful Islam who is also involved, “though we were happy with our project. course the greatest inspiration came when, within just a few days, different birds started to use the pots for shelter.

It's not only Atia,” explains his friend Aminur Rahman, “our goal is to make the whole of Delduar upazila a safe haven for birds. only need a little patronage, perhaps from the upazila administration, to do it.

Atia Union Parishad's Chairman Sirajul Islam Mallik says the youths have done well in their attempts to restore biodiversity. I will help them as much as I can,” he says.

I hope this initiative can serve to highlight the importance of protecting bird habitats,” says Delduar's livestock officer, Dr Abdul Motaleb.

Sabina Yasmin, Delduar's upazila nirbahi officer who was assigned to the post just a few weeks ago, says she has heard of the initiative and will provide overall support.

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