Stepping up process to select operator for SPM

To save both time and money in unloading crude and refined petroleum products from deep-sea oil tankers at the outer anchorage to an onshore storage facility, the then-autocratic regime in 2015 took up the Single-Point Mooring (SPM) project at an estimated cost of about Tk 50 billion. A Chinese company got the work order to construct it at Moheshkhali island in the Bay of Bengal in Cox's Bazar district under Chattogram Division. The 220-km double pipeline project was intended to cut oil unloading time from 11 days to 48 hours, thereby saving the government approximately Tk8.0 billion annually.

But with multiple time extensions and missed deadlines, the project cost escalated by 60 per cent to around Tk80 billion. The Chinese company was learnt to have completed the project in March 2024 while its contract period expired in June 2024. After a faulty trial operation, the Chinese contractor reportedly handed over the project to the SPM authorities during the Dr Yunus-led interim government in August 2024 allegedly without proper testing and commissioning. However, it is not clear how the project was taken over from the Chinese company by the SPM authorities at that time without proper testing and commissioning.

Whatever the reason, conducting a probe in the matter is an imperative to hold those responsible to account. Clearly, the builder company cannot avoid its responsibility in this regard. Meanwhile, the 18-month guarantee period to address any faults in operation as provided by the Chinese contractor expired on February 24 this year (2026). This poses a potential risk to the maintenance of the project in the future. This would cause the government to bear a huge cost in case any default in operation arises in the future. As the SPM facility could not be made duly operational, the 240,000 tonnes capacity fuel storage facility with six storage tanks built on Moheshkhali island has remained unused to date.

This is no doubt a piece of bad news at a time when the war in Middle East has rendered the fuel oil market volatile. If the SPM could be commissioned duly, the BPC could store sufficient amount of petroleum products as reserve which could be utilized in such an uncertain time. Notably, the Chinese company got the unsolicitated contract under the now-defunct 'Quick Enhancement of Electricity and Energy Supply (Special provision) Act 2010'. Initially, it was thought that the onshore portion of the SPM's pipeline would be operated by the BPC itself to reduce operation costs, given the state-run agency's experience of running the Bangladeshi part of the pipeline to transport diesel to Bangladesh from a refinery in India. Be that as it may, the primary hurdle now in the way of the SPM project's becoming fully operational is the delay in appointing an Operation and Maintenance (O&M) contractor. A move was made earlier to award the contract of O&M to a successful bidder through inviting an open tender which proved to be a failure following multiple bidding attempts. Reports have it that due to the delay in operationalizing SPM, BPC has now to bear the huge cost of paying high fees to the Bangladesh Shipping Corporation (BSC)-owned lighter vessels to ferry oil from mother vessels at the outer anchorage to the onshore facility at Moheshkhali. BPC is now reportedly evaluating the quotations for O&M contract submitted by some interested bidders. However, to save costs, the procedural aspect of contracting an O&M operator for SPM needs to be expedited.