In an exclusive interview with The Business Standard, the Managing Director of Mir Akhter Hossain Limited talks about the company’s listing with the stock market and the state of the infrastructure sector of the country
Mir Nasir Hossain is the Managing Director of Mir Akhter Hossain Limited, one of the leading construction engineering companies in the country. He is also the director of Eastern Bank Limited and a former president of Federation of Bangladesh Chambers of Commerce and Industries (FBCCI).
Mir Akhter Hossain Limited has built prominent installations including Cox's Bazar Airport Runway, Mirpur Flyover, Mugda General Hospital, Liberation War Museum, Radisson Blu, Civil Infrastructure of Ashuganj Power Plant and Pabna Railway Track.
Recently, in an interview with The Business Standard, Mir Nasir Hossain talked about the state of the infrastructure sector of the country and its future prospects.
TBS: There is a negative perception about the infrastructure sector of the country. As an entrepreneur in this sector what are your observations on this?
Mir Nasir Hossain: The infrastructures of the country are not in a very bad shape compared with competing or neighbouring countries. This sector has progressed well in the last one and a half-decade. Many private companies have invested in this sector, besides the government. The roads are being constructed with four to eight lanes. There have been many flyovers and big bridges over important rivers, including the Padma Bridge.
The power sector has seen a huge change. Many opportunities have been created including building economic zones across the country to attract investors. GDP growth has also increased. The GDP growth has been negative in many countries including China, India and Pakistan but we have been able to keep it at 5.24 during the Covid-19 pandemic. There are huge challenges concerning the post-Covid-19 condition but we have good possibilities to recover. Asian Development Bank outlook predicts that GDP growth rate of Bangladesh is expected to be 6.80 during this fiscal year.
TBS: What is the impact of Covid-19 on our infrastructural sector? How is the recovery taking place?
MNH: Covid-19 has impacted the whole world, not only in our country. But I think we have been achieving a fast recovery. The export sector is recovering. The inflow of remittance is also increasing. The construction sector has gained recovery earlier than other sectors and I believe it will be sustainable.
There are two reasons behind the fast recovery of the construction sector. One, there is an obligation to complete the projects within a fixed period. The donor agencies have a demand. Second, the expenditure would increase if the works are not done right now. Otherwise, the other sectors of the economy would be negatively impacted.
TBS: There are many big construction companies in our country including Mir Akhter Hossain Limited, Abdul Monem Limited, Max infrastructure, Spectra, NDE, Wahed Construction etc. Why are the works of mega-projects given to foreign companies?
MNH: There are some construction companies in our country now who are able to do mega-projects. But these companies could not participate in the tender directly because of the conditions of public procurement regulations. We do not have the technologies or experiences that are mentioned in the conditions. They set such criteria during the tender which we do not have. But we have the capabilities.
As a result, we are working with foreign companies in joint ventures. In many cases, the main work is done by our companies. We have been working in many important infrastructure projects as well as sub-contractors. We are one of the preferred partners of the foreign infrastructural development companies in Joint Venture Projects in Bangladesh. If the government revises the PPR and gives us some support concerning capital machinery, we would be able to implement any project.
TBS: In which projects have your company worked in the country? How long have you been working in the construction sector?
MNH: Mir Akhter Hossain has been working in the construction sector since its establishment in 1968. Now, we work in constructing Roads and Bridges, Airports, Railway tracks, Civil Infrastructure of Power Plants, Buildings and factories.
We have implemented many projects including Mirpur-Airport connecting flyover, Tongi flyover, Karnaphuli Bridge connecting four-lane road, Bangabandhu Bridge four-lane road, Radisson Blu Dhaka, Hatirjheel Project bridges, Mugda 500-bed Hospital, Ashuganj 400 megawatt power plant etc. Currently, we have 34 ongoing projects including development of airports and runways at Chattogram, Cox's Bazar and Sylhet. We are also working on Gomti Bridge and Bangabandhu Bridge connecting four-lane projects.
TBS: Mir Akhter Hossain is currently under process of being listed with our stock exchanges. Please tell us briefly regarding this IPO?
MNH: Mir Akhter Hossain Limited has been in business for more than fifty years and has gradually turned into a company with annual revenue more than Tk. 1,250 crore. We have gradually achieved this position by doing business with the utmost honesty. We have clearly mentioned in the IPO prospectus to inform the investors how we will spend the money raised from the stock market.
We have taken an initiative to raise Tk125 crore from the stock market through an initial public offering (IPO) in the book building method. The money will be used to expand the business- buying capital machinery including international standard dredging machines. It will also be used for bank loan repayment and IPO costs.
TBS: Please, tell us about the current business, financial capacity and corporate governance of Mir Akhter Hossain Limited.
MNH: As I mentioned earlier, we currently have 34 ongoing projects. We are currently undertaking projects valued at Tk. 5,761 crore. In the 2018-19 financial year, the total revenue was around Tk. 1,250 crore. The company's earnings per share have also risen steadily to Tk6.32 in the last year. Mir Akhter Hossain Limited has more than 3,500 employees including 450 skilled engineers.
We are giving utmost priority to the training of the employees and compliance maintenance. We have appointed two highly experienced independent directors who are adding values to our company. The management has been empowered and also made accountable to the board.
TBS: Mir Akhter Group has many sister concerns in various sectors including ceramics, cement, real estate, power etc. Do you have any plans to bring these companies to the stock market?
MNH: Of course! After listing of Mir Akhter, we have plans to gradually bring our sister companies to the stock market. But we would like to list the companies with a good reputation and stability. We want general investors to be part of something good.
TBS: You also have extensive experience in the banking sector. You were the director of Eastern Bank Limited, one of the country's leading banks, for a long time. Can you share your thoughts on the present situation?
MNH: There were some hiccups in the banking industry a few years ago. There are some default cultures here. And also a lack of accountability. The question of liquidity is coming up in some cases. There have been a lot of opinions about default loans.
However, the performance of our banking sector is not very bad amid the corona period. Some of the steps taken by the central bank have brought a lot of good news to the banking sector. Liquidity is in a satisfactory position as CRR and SLR have been reduced, Advance Deposit Ratio have been increased.
But, there is room for more discipline in the banking sector. And this discipline must be maintained from the three parties- the government, the central bank and the boards of banks. The board of directors of banks have to play a strong role.