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The unending wait for merchant power project

Focus on Chattogram

Chattogram Correspondent | December 11, 2018 00:00:00

Alihussain Akberali

The steel sector entity BSRM, serving the nation since 1952, is a pioneer in the country's steel and re-rolling business, having changed the civil construction landscape of the entire nation complying with the best international standards-the BSRM Xtreme 500W over the last 10 years. Since then, it has been used in building millions of homes and the infrastructure backbone of the nation. It has become a steel brand. It is a matter of immense national pride that the entire quantity of steel for the country's most iconic infrastructure project, Padma Bridge, is being entirely procured from the BSRM. It is also being used to build the state-of-the-art Rooppur Nuclear Power Plant, apart from many other major infrastructure projects and multi-storied buildings built over the last decade. The BSRM Group has made huge investment in several companies based in Chattogram and is one of the leading Bangladeshi investors in the steel industry of the country.

On the occasion of The Financial Express's stepping into the 26th year of publication, the newspaper interviewed Alihussain Akberali, Chairman of the BSRM Group of Companies, to obtain his views on different national issues and problems the businesses and industries are facing.

Asked about his proposed Merchant Power Project, a gas-based 150/300 megawatt merchant power plant which is the first of its kind, an aggrieved Alihussain Akberali said he had been trying to set up the power plant for the last six years, but failed due to lack of gas connection for the project. The company deposited the bank guarantee under a formal EOI (Expression of Interest) invited by the Power Cell some six years ago. Petrobangla had assured that gas would be provided as the government decided to import LNG (liquefied natural gas) to meet the demand for gas. Even they got the demand note for the same but the gas connection had still not been confirmed, he said.

During his visit to Chittagong Chamber of Commerce and Industry on an occasion last year, the Petrobangla chairman asserted that gas would be made available for the project. But now it is learnt that it is not possible to supply LNG because the price of LNG has increased in the international market.

The BSRM chairman said they planned to set up the merchant power plant on 100 acres of land in the Mirsarai Economic Zone at a cost of USD 200 million (Tk 17,000 crore). 'We are still waiting for the committed LNG'.

He alleged that the system in the administration was too complicated and slow. Citing examples, he said so long he had written many letters to the concerned high-ups in the ministries in Dhaka highlighting the problems they were facing. These letters have been written to the ministries of land, railways, power and energy, shipping, water resources and some others. But he did not receive a single reply from any of these ministries. It was very discouraging, very unfortunate, he lamented.

"If you don't reply to our letters, then tell us not to write to you on any problem. If we are told not to write, we will not," he said.

"When we go to Income Tax office, Customs office, Vat office, Electricity or Gas office, they treat us so respectfully, accord cordial reception because they are getting huge amount of revenue from us in terms of Income Tax, Customs duties, Value Added Tax, and others," he added.

He said the BSRM Group is one of the largest taxpayers in the country. He and his son Aameir Alihussain (MD of the Group) are long-time CIPs (commercially important persons) and tax card holders. Last year, the BSRM Group deposited $200 million to the government exchequer by way of gas, power bills, customs duty and Vat.

Instead of imposing higher taxes on the existing taxpayers, the government should concentrate on roping in other valued taxpayers who are outside the tax net and the government should encourage the potential taxpayers by offering incentives, awards and rebates.

Commenting on a media report that the government dropped a plan for any further FSRU (floating, storage and re-gasification unit) for LNG import at Moheshkhali and was considering setting up of a land-based LNG terminal, the veteran business icon said the land-based terminal would be highly problematic, because it would cost too much time and money which will not be feasible for the country's rapid industrialisation.

"It will be a wrong policy, if the government is going for the land terminal option for import of LNG. The land-based facility is not viable for our country as the facility will need berthing of the huge mother tankers with higher (above 17-18) draft for the vessels which we don't have," he said.

He urged the government policy-makers to reconsider the decision. The FSRU jetty is better and "we can run it for next few years until the land-based terminal is not set up and thus ensure continuous gas flow into the country. This is reality," he observed.

Regarding the huge bank loan default, he said the largest borrowers who have turned defaulters on loans from most of the banks are from Dhaka. A few borrowers in Chattogram have become defaulters with a much less amount of bank loans but they are set to face an image crisis due to the non-performing loans (NPL).

The genuine defaulters should get government support to pay off the loans in instalments after they give a firm business plan. But the wilful defaulters must not be let off. They must be brought under the law of the land, he observed.

He further said the lending banks and financial institutions should also be more vigilant and careful in the process of loan approval or before going to open L/C (letter of credit) for import or sanctioning a big amount of loan for a project. The banks should go for details on the capacity of the borrowers or their projects to evaluate whether the borrowers would ultimately invest in the projects prayed for and whether they would be able to refund the loans,

The BSRM chairman said the banks have huge deposits coming from remittance and they need to invest the money and not keep the money idle in the banks. At this stage, the banks go for aggressive banking and sanction loans irrespective of the borrowers' capacity to repay. So, the banks have no option but to go for aggressive banking. This is the main reason for a huge amount of default loans, he said.

Asked what support the BSRM Group wants from the government, he said his company writes many letters to many government departments but none cares to address the issues and even none cares to reply to his queries.

"They don't even bother to ask or call us to briefly state our miseries", he added. They are not performing their responsibility holding important positions in different departments. It should be inquired if they are about to harm the government's vision of building a self-reliant economy in the country.

He said the Chattogram port is still plagued with a shortage of required facilities both in the forms of both infrastructure and cargo handling equipment. He said the Bay Container Terminal had been undertaken by the Chittagong Port Authority after a long delay and the construction work of the terminal should start without any further delay.

"We were given a letter signed by the Chittagong Port Authority some five years back that we will be able to unload coal at the Bay Terminal but there is no progress at the site.


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