PC declines to revise GTCL pipeline installation project

FE Team | Published: March 31, 2013 00:00:00 | Updated: February 01, 2018 00:00:00

FHM Humayan Kabir Some major financial and procedural anomalies have been reported about a gas transmission pipeline installation project of the state-owned Gas Transmission Company Limited (GTCL). The implementation agency for it has been alleged to have violated the standard norms and practices that are reflected in its own project format, official sources said last Friday. On grounds of 'financial and procedural mismanagement' in executing the project, the Planning Commission (PC) has declined to revise the GTCL's project proposal, the relevant officials told the FE. The GTCL sought revision of its ongoing Tk 6.28 billion Jamuna Bridge Westside-Nalka, Hatikamrul-Iswardi-Bheramara gas pipeline installation project. But it was 'deleted' at the time of scrutiny of the revised project proposal that there were violations of rules about public fund spending and project implementation, the officials alleged. Now the state-run gas supplier has sought Tk 1.00 billion in additional funds, raising the revised allocation to Tk 7.28 billion in public funds for completion of the project. The Asian Development Bank (ADB) is also partly financing it. "After finding major anomalies during the process of scrutiny through a review of works about execution of the project so far and the grounds for the proposal to upsize its original allocation, we have sought clarification form the GTCL," a senior PC official told the FE. The PC has found that the GTCL has spent funds more than its original allocations for different specific components without any prior approval of the appropriate authorities. Citing the reason for cost escalation in the revised project proposal, the GTCL said they would now install 30-inch dia 82-kilometre pipeline from Hatikamrul to Bheramara, instead of the provision for 24-inch dia one, as was included in the original development project proposal (DPP). But the PC found that the 30-inch dia pipeline were already allowed in the original DPP when the Executive Committee of the National Economic Council approved the project in April 2006. Furthermore, the GTCL has spent so far Tk 2.47 billion, out of the original, aggregate allocation of fund, for purchasing machinery and equipment for installation of pipeline. Under the DPP, a sum of Tk 2.37 billion was earmarked for expenditure on account of this component of the project. Besides, the GTCL has signed a Tk 2.26 billion deal with the contractor for supplying those machinery and equipment. In addition, the state-supported gas-supplying company spent Tk 747.98 million for the works so far relating to installation of 82-kilometre pipeline against an allocation of Tk 675.28 million for installing a 97.40-kilometre pipeline under the original DPP, officials said. However, the GTCL has already signed a Tk 672.6 million deal with the contractor for the installation work of the pipeline. "These are clear violations of the rules, regulations and practices about public resources management. No project implementing agency can spend additional funds more than what is earmarked in the DPP, without obtaining prior approval of the authorities concerned," said a government official. The PC has found that the GTCL has laid down 24-inch dia pipeline in the upstream of the Jamuna Bridge West. But installation of 30-inch dia pipeline is necessary on grounds of technical viability. The team which has made the scrutiny of the GTCL's revised project proposal have raised this issue on grounds of its technical viability. When asked, GTCL managing director Md. Aninur Rahman told the FE that they sought revision of the project for higher allocations of funds as the costs of some of its components have already gone up. "Our practical experience is that when we have to follow the Public Procurement Rules, we need to revise the project proposal several times for fluctuations of the costs of different components of any project", he added. "If we go for revising the proposal every time for cost fluctuations of its required procurement materials, services or works, we will not be able to execute the project," the GTCL chief said. "It will then involve procrastination about implementation, hampering execution of the project on time for ensuring its intended objectives and benefits. So, we have to divert funds at times from other operational activities of our agency to execute the project and later on, we seek the approval of the government for any revised proposal," he added.