Non-availability of funds coupled with 'inertia' from the authorities has held back installation of two much-needed facilities for over half a decade while the nation counts high cost of petroleum import and electricity generation, said sources.
The two stuck-up projects are a new crude-oil refinery and a single-point mooring (SPM) for tankers.
They alleged that a section in the government is not serious about arranging funds for these two important projects to protect interests of those doing petroleum as well as power-sector business.
"Although significantly important, we could not attain any significant progress in luring investments into these two projects," a senior official of the state-owned Bangladesh Petroleum Corporation (BPC) acknowledged.
There is no prospect in sight either of arranging finances for these projects in the near future, he told the FE.
Another source alleged that a quarter in the government is intentionally delaying implementation of these two projects, for years together.
The government initially had decided for
BMRE (balancing, modernization, rehabilitation and expansion) of the refinery around a decade ago to treble the production capacity of ERL from 1.5 million tonnes to 4.5 million tones per year.
The Eastern Refinery Ltd, or ERL, a fully-owned subsidiary of the BPC, had floated tender subsequently and finally selected the IEL consortium of Germany and its Bangladeshi partner Orion Group after evaluating bids from a total of six bidders in 2010 to implement the project.
The project cost is around US$1.3 billion.
Before inking deal with the consortium the authorities cancelled its proposal, saying that the consortium has failed to engage a genuine financial guarantor after winning the bid.
With the cancellation of the proposal the project for BMRE of the ERL was also cancelled by the Energy and Mineral Resources Division (EMRD) under the Ministry of Power, Energy and Mineral Resources (MPEMR).
The project was cancelled because it won't be feasible to undertake BMRE for the refinery, which was set up in the late 1960s, the EMRD then said to justify cancelling the project in September 2012.
It later took initiative for building a second unit of the ERL and started campaigns for arranging funds for installing the second unit having the refining capacity of around 3.0 million tonnes per year.
Although several international firms, including from Kuwait and China, have shown interest in building the unit, the government has not yet reached any deal.
Had the government taken initiative for building the second unit of the refinery at the beginning, instead of its BMRE, its implementation could have been done much earlier, said an industry-insider.
He said the project of installing the SPM faced similar fate.
The government had initially estimated 'wrong' project costs of around $136 million on the basis of a feasibility study conducted by a Pakistani firm to install the SPM in 2010, a senior BPC official said.
The Jeddah-based Islamic Development Bank (IDB) subsequently had agreed to fund $129 million for installing the SPM near Kutubdia Island in the Bay of Bengal.
But the estimated costs had snowballed when a Germany-based firm, ILF Consulting Engineering, carried out a detailed study on the proposed SPM and re-estimated the project cost at $327 million, said the BPC official.
The IDB later agreed to increase its funding by 70.54 per cent to $220 million from its earlier commitment of $129 million.
But the government is still struggling to arrange additional funds for the SPM project, the BPC official added.
Had the authorities undertaken the detailed study on the SPM at the earliest and estimated the project cost rightly, it could have been set up much earlier, said the source that smells a rate in the whole process.
Pointing at the benefit of a new refiner, a senior BPC official said building the new facility would reduce the BPC's import costs by around Tk 7.0 (9.0 US cents) per litre.
Installation of the SPM, to carry petroleum from vessels moored at an outer anchorage to depots onshore, could save both time and money, said the official.
It would help unload crude and refined petroleum products from ocean-going vessels in the deep sea without berthing at the port, he added.
The BPC currently pays US$5.50 per tonne to small vessels owned by the state-owned Bangladesh Shipping Corporation (BSC) to ferry petroleum to the shore from larger vessels moored at the outer anchorage in the Bay.
The SPM would save the BPC around $8 per tonne now being incurred due to vessel transfer, said the official.
It would also cut down fuel-unloading time to around one-fourth or to two-three days from current 11-12 days and thus raise fuel-handling capacity of the BPC.
"It might save at least $40 million annually as the BPC can avoid paying fare for lightering," he added.
Besides, electricity-generation costs from the high-cost oil-fired power plants would be reduced significantly if these two projects could be implemented, a senior official of Bangladesh Power Development Board (BPDB) said.
Currently, the BPDB, being the lone buyer of electricity from power plants, has to pay for fuel import in addition to electricity-purchasing costs, the official pointed out the money-spinning crafts.
"It has been quite evident that both these important projects are facing the 'ill-motive' and deliberate neglect from government high-ups," said former Director- General of Power Cell BD Rahmatullah.
A nexus between some corrupt government officials and private players have been delaying implementation of these projects, he alleged.
azizjst@yahoo.com
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