Govt moves to suspend gas supply to steel factories

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Jasim Uddin Haroon
The government has taken a move to suspend gas supply for at least 17 hours a day to the major hub of steel in Chittagong amid strong opposition from the industry.
The state-owned Petrobangla Monday has proposed to the steel and re-rolling mill owners to keep their plants open from 11pm to 6am a day instead of 24 hours.
Petrobangla officials including its director of operations and Karnaphuli Gas Company officials met leading mills owners on the day.
Petrobangla sources said it took the move to ensure smooth supply of gas to the fertiliser and power plants.
Around 70 steel plants are located in Chittagong and they supply nearly 80 per cent MS (mild steel) rod of the total demand of around 2.5 million tonnes. They also supply a large share of steel bars.
Steel's big names like BSRM, AKS, RSRM, KSRM, GPH Ishpat, Baizid Steel, Shima Steel are all located in the port city.
Industry people said the steel plants would suffer largely once the government plan is executed.
Chairman of Ratanpur Steel Re-rolling Mills (RSRM) M Rahman said: "the move will jeopardise the industry."
He added this would increase steel prices to a great extent in the local market saying: "Many will import the product and the local steel industry might face large-scale closures."
Earlier during 2008-09, local traders imported MS rod as the local steel prices jumped up following a tax discrepancy between for those imported and those locally produced.
Industry people said steel plants needed at least three hours extra gas supply prior to going into production.
Aameir Alihussain, a director of the largest steel plant -- BSRM Group -- told the FE: "We need round the clock gas supply and the government plan will have a negative impact on the industry."
Md Jahangir, chairman of GPH Ishpat said: "Gas rationing only in Chittagong is completely illogical."
He also said steel plants which are highly capital-intensive will face bankruptcy following the government move.
"We take bank loans for projects as well as for working capital for six months. All of us formulate business plans prior to taking the loan. This move will definitely create serious financial trouble for the sector."
The industry people said the factories, which have employed more than 100,000 people, would have to retrench 75 per cent workers once the plan was executed.
However, the Petrobangla officials will meet Thursday next in this connection.
The CNG stations have been keeping their pumps closed from 3pm to 9pm daily since August 16 amid protests by the CNG station owners.