Two more FSRUs soon to ease supply

The government plans to procure two more floating storage and regasification units (FSRUs) to expand liquefied natural gas (LNG)-import capacity under efforts to ease energy crunch, says Prime Minister Tarique Rahman.

And a decision to this effect is expected within next month, he told business leaders during exchange views Wednesday about the country's economic field.

The Prime Minister made the announcement during separate meetings with leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Textile Mills Association (BTMA) at the Prime Minister's Office.

He also informed that a high-powered committee would identify and resolve the challenges facing the country's readymade garment and textile sectors.

The committee, comprising the commerce minister, the prime minister's economic and planning adviser, the Bangladesh Bank governor and representatives from the apparel and textile industries, has been tasked with reviewing the sectors' key challenges and recommending policy measures.

The Prime Minister directed the committee to hold its first meeting within a week and submit recommendations, based on which the government would take necessary steps to address the industry's concerns.

Speaking to The Financial Express after the meeting, BGMEA President Mahmud Hasan Khan Babu said business leaders urged the government to prioritise resolving the energy crisis, expand Bangladesh Bank's low-cost refinance schemes and address a number of issues related to the National Board of Revenue (NBR).

"We urged the government to prioritise resolving the energy crisis. We also requested an expansion of the Green Development Fund (GDF) and Technology Development Fund (TDF), and raised various tax-and customs-related issues with the Prime Minister," he said.

Mr Babu said the Prime Minister informed the business leaders that the government was moving ahead with a plan to procure two additional FSRUs to enhance LNG-import and-regasification capacity.

"A decision on the two FSRUs is expected within the next month," he said, adding that no details were shared as to whether the projects would be implemented directly by the government or through a public-private partnership (PPP).

On industrial gas connections, Mr Babu said more than 300 factories had already deposited the required fees and were awaiting connections.

He, however, clarified that the government's decision to suspend new industrial gas connections applies only to fresh applications.

"If anyone applies for a new gas connection now, the application will not be accepted. However, around 1,800 small and large industrial units that applied seven to eight years ago will receive gas connections on a priority basis. New applications will be considered only after those pending cases are cleared," he said.

Meanwhile, the government has decided not to allow any new industrial gas connections for the time being due to declining domestic gas production and limited LNG-regasification capacity at the country's existing two FSRUs. As a result, applications for new gas connections submitted by 1,857 industrial units to various gas-distribution companies will remain pending.

The decision was communicated through separate letters issued by the Energy and Mineral Resources Division and Petrobangla.

In a letter dated July 14, the Operation-4 Wing of the Energy and Mineral Resources Division informed Petrobangla's acting chairman that 1,857 applications for industrial gas connections were pending with different distribution companies.

However, no new gas connections would be considered at this stage because of the continued decline in domestic gas production and the limited LNG- regasification capacity of the existing two FSRUs. The division instructed Petrobangla to take the necessary steps accordingly.

Following the directive, Petrobangla's Production and Marketing Division on July 17 instructed the managing directors of the country's six gas-distribution companies not to process or approve any new applications for industrial gas connections until further notice.

In a separate meeting, BTMA leaders proposed a coordinated tariff, tax and export-support policy aligned with those of competing countries to improve the competitiveness of the primary textile and export-oriented garment sectors.

They also sought a special refinancing scheme, with an interest rate capped at 5.0 per cent, for existing loans of export-oriented primary textile mills.

The BTMA president urged the government to simplify implementation of the announced Tk 200-billion-working-capital-support package by easing procedures, introducing project-based Credit Information Bureau assessments, and providing temporary relaxation of CIB requirements for closed or partially closed factories.

The association further proposed capital support and long-term concessional financing for technology modernisation, balancing, modernisation, rehabilitation and expansion, energy efficiency improvements, and new investments.

It also requested a fast-track service mechanism under the Prime Minister's Office to ensure quicker delivery of government services, including gas, electricity, banking and customs support, for export-oriented industries.

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