The infrastructure trailblazer

He ventured into businesses in 1973, at a time when there was hardly any track record of the country producing successful entrepreneurs.

But in the course of the last four decades, Muhammed Aziz Khan has gone on to cement his name among the country's most illustrious businessmen. “The independence of Bangladesh provided unprecedented opportunities to us. There was demand for entrepreneurs.”

Khan's first steps as an entrepreneur were taken with a friend, whose father's death thrust him into the family import business. The 18-year-old Khan borrowed Tk 30,000 from his father to partner in the venture.

With over a decade of solid real-world experience behind him, Khan set up Summit Industrial and Mercantile Corporation in 1985, aiming to develop the country's infrastructure.

Today, Summit's subsidiaries are the country's first private sector power generator, a port owner and operator, and provider of information communication connectivity via fibre optic.

“My brothers joined me and we started this amazing journey. We are very fortunate to be known as pioneers of Bangladesh's infrastructure sector.”

Summit Group's jewel in the crown, Summit Power, generates roughly 16 percent of the country's total electricity. Khan said the private sector's contribution to the power sector is quite substantial.

Bangladesh could not have come out of the stifling trap of power shortages without the support and participation of the private sector. “The entrepreneurs showed extraordinary courage to leapfrog into infrastructure industry. This is unheard of in an emerging economy.”

About Summit Power's plan, Khan said the company would like to supply at least 20 percent of the national electricity demand.

The current trend of low prices of fuel and commodities has emerged as a boon for Bangladesh, as the country would be able to save up to $7 billion a year on imports of petroleum, steel, cotton and soybean oil.

In four years, the government would be able to save $28 billion on imports. With this saving, the government can borrow another $28 billion, and the whole amount can be invested in improving infrastructure, said Khan.

“This sort of opportunity does not come all the time -- it comes very rarely. We have to seize the moment.”

All that is needed is capacity expansion, particularly of the government. The government needs to award more tenders, appoint more project managers and make bureaucracy more efficient, he said.

Besides, in the international debt market, the interest rate is at its lowest -- a development he has not seen in his lifetime. He said private companies such as Summit have received $500 million in loans with tenure of 15 years and interest rate of 4.25 percent, whereas the government can borrow at 1 percent.

At present, Bangladesh offers huge investment opportunities, as the country's macroeconomic conditions are excellent, the political situation is more or less stable and the reserves are increasing, he said. “This is a great opportunity to achieve double-digit economic growth.”

The Summit chairman also said the government needs to build a complete new city as a capital, wherever it prefers, to prevent Dhaka from becoming a completely dysfunctional city.

Khan, who has an MBA from the Institute of Business Administration, has high respect for his fellow entrepreneurs, as doing business in Bangladesh is difficult.

“There should be more accommodation among people, respect for each other, more discipline and efficiency and less hypocrisy, and a better rule of law and electoral democracy.”

So far, Summit has invested $1.2 billion in the country and now provides jobs to 5,000 people. Its revenues last year came to Tk 5,000 crore, up 64 percent over 2013, thanks to the commissioning of the 350-megawatt Summit Meghnaghat power plant.

Summit has recently been awarded the prestigious 'AAA' long-term rating and 'ST-1' short-term rating by Credit Rating Information and Services Ltd, the country's first credit rating company.

It indicates Summit's strong equity base, good return on investment, earnings prospects, operating performance of the investee companies, good debt repayment capacity, a high franchise value and an experienced top management team, according to the rating agency.

“This is an excellent recognition for the company's corporate governance and attitude towards business, remaining within the rule of law. We are exceedingly delighted that a private sector industrial company in Bangladesh could get 'AAA' rating.”

Looking ahead, the company plans to invest more -- if the government awards it more contracts. “I hope the government would allow us to set up plants to generate another 1,000mw of electricity, construct and operate ports and lay fibre optic in more areas.”

Provided he has time and strength, Khan said he will work directly for an inclusive society.

“It is disheartening and hurtful to see differentiations in a society,” Khan said, adding that it is morally incorrect.

“We can't keep the vast majority of the population less educated, receiving less opportunity. We have to unleash the full potential of the society.”