COMMERCIAL ADVOCACY AND EXPORT PROMOTION EFFORTS JULY

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