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3. 3 EXPERIENCE OF BR Bangladesh Railway leased out 1500 km of one pair OFC to Grameen for 20 years with exclusive right, through international tender in 1995. The bidding was on a combined set of weighted points of technical parameters and rental to be paid.
4. 4 An Indicative Lay-out of PGCB’s OPGW Network
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8. 8 Indicative Layout of PGCB System with Lessee’s System
9. 9 PGCB’s Countrywide OPGW Network
10. 10 Lease Asset One Pair of Dhaka-Chittagong OPGW
Length: 246 Km
Starting From Rampura to Hathazari
“as is where is” basis
11. 11 Business Chain around the Lessee
12. 12 Major Parameters
13. 13 Capacity Capacity
STM 64 (10 Gbps)
Minimum Initial Capacity
STM 16 (2.5 Gbps)
14. 14 Lease Term Lease Term
15 years
Subject to validity of L1 and L2
upto the earlier of the validity of L1 and L2
Beyond that, there is scope for renewal to cover at least upto 15 years, if L1 and L2 can be renewed
L1- License of PGCB and L2 – License of Lessee
There was scope of renewal beyond 15 years
15. 15 Leasing Process
16. 16 Leasing Process
17. 17 Expression of Interest Expression of Interest was invited
Notice published in newspapers
EOI document was made available
EOI closed 16 February 2005
18. 18 Objectives of EOI Objectives of EOI were to
Apprise potential Investors of the OPGW Network
Develop a technical and commercial framework
Transparent leasing process
Benefit to all types of telecom operators and users
Collection of information, ideas and suggestions
for preparing a comprehensive Tender Document and Lease Agreement with feedback from the Investors
19. 19 Publication of Notice Notice inviting tenders published in six national dailies
First published in the Daily Observer on 31 October 2005
Tender submission dead-line was
29 December 2005
Deadline extended to
30 January 2006
(On request of the tenderers at pre-tender meeting)
Extension notice also published in six national dailies
20. 20 Tender Nitty-gritties Tender Security : Tk 50 lakhs
Validity: 30 Days beyond
the tender
validity Period (180 days)
21. 21 Tender Submission 6 Investors purchased tender document
Concord Pragatee Consortium Limited
National Telecom Limited
Grameen Phone Limited
TM International (Bangladesh) Limited
Warid Telecom Bangladesh Limited
Sheba Telecom Limited
4 Tenderers submitted tenders on due date
Concord Pragatee Consortium Limited
National Telecom Limited
Grameen Phone Limited
TM International (Bangladesh) Limited
22. 22 Tender Evaluation Tender evaluation done in two parts
Part I: Qualification and Technical Responsiveness Test
Part II: Financial Ranking
Based on GAR quoted
Basis of awarding the lease
passed the Part I evaluation
Quotes Highest GAR in Part II
23. 23 Part I Evaluation Qualification and Technical Responsiveness Test
24. 24 Part II Evaluation: Financial Ranking Guaranteed Annual Rental
25. 25
26. 26 Financial Ranking
27. 27 Critical Terms and Conditions
28. 28 Delineation of Risks and Responsibilities O&M Obligations of the Parties
PGCB’s O&M Obligations
PGCB to take O&M responsibility of the overhead OPGW and CUEs
PGCB should provide space of CUEs
Lessee’s O&M Obligations
Lessee is required to use its best effort to maintain the segments of the network
which is under its exclusive control
PGCB will not take consequential losses to sub-lessee
29. 29 Minimum Initial Capacity Minimum Initial Capacity
Minimum Initial Capacity of MUX needs to be prescribed
so that sufficient bandwidth capacity is available for sublease
to prevent that the lessee restricts others to sublease the bandwidth due to capacity limitation
Monitoring of the Capacity of the Lessee
Specifying minimum initial capacity
Installing two sets of equipments
One at TNSP Premises and one at PGCB Premises
30. 30 Competition Requirements: OUR The lessee requires to maintain an Outside Use Ratio (OUR)
To keep x% of the capacity reserved to sublease
irrespective of need for own use or demand for bandwidth
To provide the bandwidth reserved for outside use
in a non-discriminatory manner on request
at rates and charges
Approved by BTRC
31. 31 Payments to PGCB Guaranteed Annual Rental (GAR)
(Taka per Year)
to be paid quarterly by split of GAR in four installments
certain amount of rental to PGCB without being affected by the Lessee’s business fluctuations.
Variable Lease Rental
(Taka per Year)
To be paid quarterly (can also be divided in smaller time slots)
A % of Lessee’s Revenue or unit rate multiplied by number of units of business
Units of business to be defined
Lessee’s Revenue from Sublease of the bandwidths
Lessee’s Revenue from Own Use by billing own customers
32. 32 Payments to PGCB Upfront Payment
at the time of signing lease agreement
For commitment of Lessee
A 10% of Present Value of GARs
33. 33 Availability Availability guarantee: 98% time of the year
Beyond allowable interruption (2% time):
lessee can claim GAR and VLR for the period of non-availability
Claim Non-deductible from rentals
34. 34 VLR Variable Lease Rental (VLR)
25% of E1-km*rate.
Varies with lessee’s business.
To be paid quarterly
35. 35 Sub-lease of “OUR” Capacity Reserve for sub-lease
30% of total capacity
If no sub-lease request, lessee requires PGCB’s permission
May use more than 30%
Single Sub-Lessee
not more than 10% of the capacity
36. 36 Time Limits for Implementation
37. 37 Lessee’s Obligations and Rights Performance Guarantee
(max. of first five years GAR) for five years or more
to be paid on signing the agreement,
To maintain implementation work schedule
To train PGCB personnel
To comply with L2
38. 38 Lessor’s Obligations and Rights Space and Power for CUE
Access to Lessee’s premises
No-Withdrawal of facilities provided
39. 39 Operation and Maintenance Lessor’s O&M
To maintain availability
Lessor will operate and maintain an OMC
Service interruption (within 2%) due to maintenance also counted as non-availability
Lessor arrange spare OFC capacity for avoiding long interruption
40. 40 O&M Contd. Lessee’s O&M
To identify and inform faults in the lessor’s system through Network Management Center (NMC)
Maintain facilities to protect environment, public safety and lessor’s system
Maintain professional personnel for the lease asset
41. 41 Termination Ways of Termination
Willful Termination
Termination due to Force Majeure
Termination due to Lessee’s Events of fault
Termination due to Lessor’s Events of fault
Termination due to cancellation of L1 and L2
Termination upon expiry of lease term
42. 42 Transfer of Equity Partial Transfer
May transfer among themselves within first five years with following conditions:
Lead member maintains 51% share
Others to maintain 25% of their original shareholdings
Full transfer
May transfer 100% after five years
43. 43 Review of Agreement Scope to review after 5 years
44. 44 Comparison between BR and PGCB cases
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48. 48 Conclusion a good learning experience for all of us
to understand the telecom business
Among the four operators:
GP expected to be a good pay master
CPC has no Telecom business experience
NTC is a PSTN operator
AKTEL is mobile operator, but quoted the lowest