US embassy cable - 05DHAKA4413

UNCLAS SECTION 01 OF 03 DHAKA 004413 
 
SIPDIS 
 
SINGAPORE FOR FCS 
NEW DELHI FOR FCS 
COMMERCE FOR BRYAN LOPP AND ADINA ADLER 
STATE FOR EB, EB/CBA, SA/PAB 
 
SENSITIVE 
 
E.O. 12958: DECL: N/A 
TAGS: ABUD, BEXP, ECON, AMGT, BG 
SUBJECT:  COMMERCIAL ADVOCACY AND EXPORT PROMOTION EFFORTS JULY 
2004 - JUNE 2005 
 
Sensitive but unclassified 
 
Summary 
------- 
 
1.  (U) This cable catalogs Embassy actions in promoting U.S. 
exports to Bangladesh and to assist U.S. businesses win tenders 
and contracts or settle trade and investment disputes during July 
2004 to June 2005.  Eexamples of Embassy "success stories" in 
expanding market opportunities for American business in 
Bangladesh are provided below. The cable also describes Embassy 
interventions on behalf of American firms whose products, while 
clearly technically superior, were not price competitive with 
firms offering products of dubious technical quality. 
 
Advocacy 
-------- 
 
2.  (SBU) American Health Consortium, LLC (AHC):  The Bangladesh 
government undertook a $30 million project named "Bangladesh 
Kuwaiti Maitri Hospital (BKMH)" and invited proposals to set up 
and operate a modern hospital in Dhaka on a pre-existing 
facility.  AHC, an American consortium of healthcare 
professionals and entrepreneurs, submitted their proposals.  Post 
advocated on behalf of this consortium per a Commerce advocacy 
request.  We worked with various BDG agencies at every step in 
the process for more than two years.  Post sent letters on behalf 
of the Ambassador and other key officials on several occasions 
and spoke with several high-level ministers on behalf of AHC. 
Economic officers repeatedly raised concerns over lack of 
transparency and repeated delays in the process with all relevant 
authorities.  Through Post's intervention, AHC finally won the 
tender.  They received the "Acceptance Letter" from the Ministry 
of Health on December 19, 2004.  AHC is now in the process of 
signing a formal contract before they take possession of the BKMH 
complex. 
 
3.  (SBU) Varian Medical Systems, USA:  This US firm participated 
in a Bangladesh government tender to purchase some medical 
equipment with financial assistance from the World Bank.  Post 
spoke to the World Bank officials on behalf of Varian to ensure 
that the evaluation process was fair and transparent and was done 
expeditiously.  As a result, this U.S. firm obtained a work-order 
to supply a Linear Accelerator worth $1,549,857 under a contract 
with the Director of Central Medical Stores Depot in Tejgaon, 
Dhaka, under the Ministry of Health and Family Welfare. 
 
4.  (SBU) Connexion by Boeing (CBB):  Boeing applied to the 
Bangladeshi government for assignment of frequency and permission 
to operate Aeronautical Mobile Satellite Service (AMSS) over the 
territory of Bangladesh.  Post advocated on behalf of Boeing to 
expedite this process.  Embassy officials wrote to and met with 
officials in the Bangladesh Telecommunication Regulatory 
Commission (BTRC) and followed up on a regular basis.  As a 
result of our efforts, BTRC granted Boeing's request for 
frequency assignments for uplink and downlink on secondary and 
shared basis for the AMSS usage within the territory of 
Bangladesh. 
 
5.  (SBU) Bay Phones (joint venture between Westec.Com Inc., USA 
and Westec Ltd., Bangladesh):  Bay Phones was licensed by 
Bangladesh Telecommunication Regulatory Commission (BTRC) to 
operate the Public Switched Telephone Network (PSTN) in the South- 
East zone of Bangladesh.  After importing the telecommunication 
equipment into Bangladesh, Bay Phones experienced great 
difficulty in getting their equipment out of customs at Dhaka 
Airport.   Bay Phones was forced to supply a bank guarantee worth 
nearly $300,000 to get the equipment released.  The National 
Board of Revenue (NBR) required this bank guarantee because they 
incorrectly classified the equipment under a higher duty rate. 
Post intervened in this matter with a letter to the NBR Chairman 
and, after a few meetings, got the $300,000 released from NBR. 
 
6.  (SBU) Telford Aviation Services:  This U.S. Company located 
in Bangor, Maine, in June 2004, supplied parts valued at $50,000 
for a Cessna 152 training aircraft to the Directorate General 
Defense Purchase (DGDP).  The DGDP delayed payment citing various 
excuses ranging from processing delays to need for additional 
approvals.  We intervened on behalf of the U.S. Company through 
several calls and letters to the DGDP.  The DGDP finally released 
the full amount to Telford recently and is even in the process of 
releasing Telford's Performance Guarantee worth US $5,180. 
 
7. (SBU) Diamond Diagnostics, USA: A Bangladeshi Company, 
Medilink International, bought medical equipment for more than 
$36,500 from Diamond Diagnostics, (USA) but only paid $2,309 
against the $36,523 Letter of Credit (LC).  Medilink took 
possession of the equipment without full payment due to an error 
made by the bank.  Upon notification, Medilink refused to pay the 
remaining amount.  We contacted the local company based on a 
request from Diamond Diagnostics and pressed the owner to make 
full payment.  Immediately following our meeting, Medilink made 
full payment to Diamond Diagnostics for the products received. 
 
8. (SBU) International Security Products:  This U.S. document 
security printer company received a purchase request from a 
Bangladeshi who claimed to be working with the Minister for 
Education to provide security documents.  Upon notification, 
Embassy's economic/commercial staff contacted the Ministry of 
Education and found out that this was a fraudulent offer. 
 
9.  (SBU) Deamar USA, LLC:  Deamar sold 11 containers of raw 
cotton to three Bangladeshi buyers and upon arrival of containers 
all the buyers refused to receive the goods.  Deamar decided to 
re-export these containers to other countries but the original 
buyers refused to provide Non-Objection Certificates, which is a 
procedural requirement for reshipment.  Post contacted the 
Customs Commissioner on this matter by letter. Through Post's 
intervention, the customs office dealt with this case 
expeditiously.  Nine containers have been re-exported in two 
phases, while two were bought by one of the original local 
buyers. 
 
10.  (SBU) Commodity Export Corporation/Petrex Cotton Company: 
This U.S. Company supplied 10 containers of raw cotton to a 
Bangladeshi buyer, but upon arrival of the containers the buyer 
refused to receive the goods.  Commodity Export Corporation 
decided to re-export these containers to buyers in other 
countries, but the Customs office refused approval for re-export. 
Post addressed this matter in a letter to the Customs 
Commissioner and our intervention brought in positive results. 
The US firm received necessary approval in a very short time and 
the containers have already been shipped. 
 
11.  (SBU) Best Western La Vinci Hotel:  In July 2003, Post sent 
a letter to the Civil Aviation Authority of Bangladesh (CAAB) 
requesting allocation of booth space to Best Western La Vinci 
Hotel, an American hotel, at Zia International Airport in Dhaka. 
After almost two years of bureaucratic red-tape, the Best Western 
La Vinci Hotel finally obtained permission to set up the booth. 
 
12.  (SBU) FMC Technologies, Inc. (Jetway division):  Jetway 
participated in a tender for extension and modernization of 
Passenger Terminal Building and Construction of the first floor 
of Osmani International Airport Sylhet, Bangladesh.  The tender 
was primarily to supply, install, test & commission Passenger 
Boarding Bridges in the Sylhet airport. Post's 
Economic/Commercial officers met with the Chairman of the CAAB, 
Civil Aviation Minister, Finance Minister and other senior 
government officials and raised concerned over unfair tender 
evaluation processes.  We encouraged the government to ensure 
fair and equitable evaluation of the bids based on suitable 
technical qualifications and not just based on the lowest bid. 
The Civil Aviation Ministry awarded the contract to an Indonesian 
firm, Bukaka, based on price considerations and not on technical 
qualifications.  We have since met repeatedly with the Civil 
Aviation Minister and continue to press for re-evaluation. 
 
13.  (SBU) Bowe, Bell & Howell (BBH): BBH participated in a 
tender under the Post and Telecommunication Ministry to supply 
mail sorting machines.  Although the Technical Evaluation 
Committee (TEC) recommended BBH, the Ministry awarded the 
contract to Shanghai Research Institute (SRI), the Chinese 
bidder, based on the lowest price offer without considering 
technical qualifications.  Post advocated for re-evaluation on 
the bids based on technical specifications.  We raised this issue 
at different government levels with several phone calls and 
meetings; however, government tender regulations are heavily 
biased in favor of the lowest priced bidder deemed to meet the 
tender's minimum technical specifications. 
 
Export Promotion 
---------------- 
 
14.  (U) Post's Economic/Commercial FSN provided commercial 
assistance through various export promotional tools to many 
Bangladeshi and US firms.  As a result, some export deals are in 
the works and many more are expected in the near future. 
15.  (SBU) As a result of our export promotion efforts, some U.S. 
companies have started exporting to Bangladesh.  One such success 
is an exclusive dealership agreement between U.S.A. ALL AMERICAN, 
a US exporter, and a Bangladeshi buyer.  The latter is now in the 
process of opening a letter of credit to import lubricant for 
automobiles initially worth $20,000 with an agreement to purchase 
more in the future.  Negotiations are underway between a 
Bangladeshi firm and Custom Coaches International (CCI), an 
American company, to supply mobile medical hospital units. 
 
Outreach 
-------- 
 
16.  (U) Post has been successful in reaching more Bangladeshi 
importers and informing them about new U.S. products and 
services.  The 14th annual US Trade Show held February 16-18 at 
the Dhaka Sheraton Hotel was the biggest ever in it's 14-year 
history and attracted an estimated 22,000 visitors.  An informal 
survey of Trade Show participants indicates that several American 
companies at the event completed sales and developed leads that 
resulted in significant sales.  The Trade Show was followed by 
another event called America Week that took place from February 
28 to March 2, 2005 in Khulna in southeastern Bangladesh. 
Representatives of six U.S. corporations active in Bangladesh 
participated in the week-long event.  This event also attracted 
many visitors.  In order to promote new U.S. products and 
services, the Trade Center organized two catalog shows to 
coincide with the Trade Show and America Week.  The Trade Center 
also distributed catalogs of these participating firms among the 
business community.  These export promotion efforts have lead to 
increased interest among Bangladeshi buyers in U.S. products. 
 
17.  (U) Post organized an unescorted delegation to the Power-Gen 
International 2004 Conference and Exposition (PGI 2004), which 
took place November 30-December 2, 2004, in Orlando.  Post also 
organized an escorted healthcare delegation to the U.S. from May 
31 through June 11, 2005, which was sponsored by the U.S. Trade 
and Development Agency (USTDA).  Representatives from the public 
and private sector joined the delegation.  The event was designed 
to introduce Bangladeshi healthcare delegates to U.S. hospitals, 
advanced medical technology, cutting-edge medical equipment and 
associated services.  In addition to acquainting U.S. companies 
with investment opportunities in Bangladesh, the visit allowed 
the delegation members, especially government officials, the 
opportunity to learn about American healthcare products.  This, 
according to the delegates, will eventually help them prepare 
tender specifications for the procurement of new healthcare 
equipment in Bangladesh. 
CHAMMAS