Posted on August 15, 2017
By Mehdi Musharraf Bhuiyan, Financial Express
The government is ready with a draft agreement for forming Special Purpose Company (SPC) with a foreign firm for carving out Payra deep-sea port channel.
Under the deal, officials said, the Payra Port Authority (PPA) will hold majority shares in the proposed joint-venture company.
The draft agreement, now being reviewed by the Ministry of Shipping, stipulates that the paid-up capital of the Special Purpose Company will be Tk 5.0 million.
“As per the agreement, PPA will hold 51 per cent shares of the proposed JVC while Belgian company Jan De Nul (JDN) will hold 49 per cent shares,” a Shipping Ministry high official told FE.
The deal in the offing also provides that JDN will be responsible for the initial funding of the dredging scheme while the PPA will be required to obtain sovereign guarantee from the Government of Bangladesh. Apart from initial funding, JDN will be responsible for providing operational guarantee for the dredging-related works, officials informed.
On the other hand, the PPA will be responsible for demonstrating and warranting sufficient income flows and resources of the proposed SPC to export-credit agencies, banks and other financial institutions.
Shipping Ministry officials said they were now aiming to form the long-awaited SPC by the end of next month after the agreement is reviewed and finalized.
“The draft agreement is now being reviewed by the ministry and our target is to complete all the formalities by next month,” the MoS high official told FE.
The draft agreement also provides for the formation of a five- member Board of Directors for overseeing the operations of the company-three of whom will come from PPA while two from JDN.
The SPC board will be chaired by a director of the PPA during the first year of its existence. However, the chairmanship will be altered between JDN and PPA subsequently, the agreement says.
The board will also be responsible for, among other things, making necessary arrangements for any required additional financing of phase 3 and 4 of the dredging scheme.
The draft agreement has also specified that both the partiers to the JVC will be able to share their transfers only after the lock-in period of 5 years is over.
Situated on the bank of Andharmanik River of Patuakhali, the Payra port was formally inaugurated in 2013. Limited-scale operations started at the port in August last year.
The port is expected to be developed in phases by 2023.
According to experts, around 14.5-metre draft is required to turn Payra into a true deep-sea port. In this context, the Payra Port Authority signed a MoU with the Belgian company, Jan De Nul, last year to conduct capital and maintenance dredging.
The two parties at that time also agreed to set up this proposed joint-venture company, the tenure of which is expected to be 25 years.
Source: Financial Express
