News Title : Satellite deal is poor value for money

News Date : 2015-11-17

-Tribune Editorial
BRTC’s signing of a Tk2,967 crore agreement, with French company Thales Alenia Space to develop and launch Bangladesh’s first-ever satellite, represents poor value for money. The government is claiming that once the satellite is launched at a total project cost of some $380 million, it will “eventually help save the country $14m a year.” As the facts stand, there is no financial case for this project. It should be obvious that a payback period of 27 years seems like a bad investment decision, when most satellites have a projected lifetime of less than 20 years. One mooted reason for pursuing this project has been the suggestion that Bangladesh could earn additional revenues by renting out spare capacity to neighbouring countries. This is a highly risky assumption. Satellite costs are becoming ever more competitive and it is probable that Chinese and Indian satellites would be able to provide cheaper alternatives to Bangladesh. It would have made far more sense to simply wait a few more years for Bangladesh’s satellite usage to increase to the point where greater savings could have been made and the project’s capacity would be utilised within the country. The government has to learn to spend tax-payer funds more effectively. The money being committed to this satellite project would have been far better spent on government schools and hospitals, or new power plants and higher priority projects. Spending this large amount of tax-payer money on improving and education and investing in skills would be a far more productive way to help Bangladesh nurture high technology industries. That way, when a growing economy makes the project more financially viable, we will have the capacity to harness more of the finance, resources, and skills needed to develop this project

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