Industrial production stagnating for gas shortage, businesses decry

Energy business is opening up for crisis resolution, the adviser concerned said as businesses Saturday urged the interim government to ensure reliable quality gas supply to industries forthwith for uninterrupted manufacturing operations.
They lamented that industrial growth had either stagnated or declined in recent years, as evidenced by the downtrend in energy consumption within the sector over the past two to three years because of past mismanagement and 'theft' in the sector.
As a result, industries are losing their capacity to generate employment, which is adversely impacting overall economic growth.
Nothing that the ongoing national reforms may take time, leading businesspeople at a meet with government functionaries stressed that addressing challenges in the industrial sector cannot wait and requires immediate attention.
They urged the government to stop 'theft' in the gas -transmission system and mete out exemplary punishment to the offenders immediately.
The speakers came up with the observations at a seminar titled 'Ways of Mitigating Energy Crisis in the Industrial Sectors', organised by Bangladesh Chamber of Industries (BCI) in a city hotel.
Speaking as the chief guest, Energy Adviser Muhammad Fouzul Kabir Khan said real solution for energy crisis lies in going for inexhaustible renewable energy.
He said the government is going to advertise this week for 40 renewable-energy plants.
The adviser mentions that people cite lack of land as an obstacle to setting up renewable -energy plant which is "entirely untrue".
He disclosed before the business audience that the government has planned to issue an open tender in December to bring the recently discovered gas resource in Bhola to Dhaka.
"Interested businesses can participate in the tender and bring the Bhola gas to Dhaka in the form of compressed natural gas [CNG] or liquefied natural gas [LNG]," the adviser extended the offer of the post-uprising government to private businesses.
Mr Fouzul Kabir said although 70MMCF gas had been found in Bhola, it could not be brought to Dhaka or industrial areas for lack of a pipeline.
"Bringing Bhola's gas to Dhaka will somewhat alleviate the gas shortage in industries," he added.
He points out that key problems in the country's economy are lack of competitiveness and waste in the public-procurement process.
"Usually, if you want to do business in the public sector, you have to know the minister, high officials," he told the business meet, adding that the current government has taken plan to open public- procurement process in the most possible way to ensure competitiveness and transparency.
Mr Khan said he removed anti-competitive conditions for opening up businesses.
"We have saved Tk 3.7 billion from import of six months' fuel by removing a clause, we also reviewed the list of LNG importers," he said about the reforms being undertaking in this sector, as part of national reform recipe.
He urged businesses to utilize these opportunities of opening up to do business in the public -procurement sector.
"If good businesses do not come forward to do business, bad businesses will drive away good businesses like in previous days," he said.
He notes that business with good relations with the government, which is part of 'crony capitalism', is not sustainable, and ultimately these types of businesses collapse.
Echoing the energy adviser's views, Commerce Adviser of the interim government Sheikh Bashir Uddin made a call for businesses to use renewable energy.
He also urged the businesses to make partnership with the government to solve gas crisis, whether setting up pipelines in individual initiative or setting up renewable- energy plant.
He said cost of solar is probably the lowest today.
The businessman-turned government functionary, terms gas-connection guidelines in the country a 'bond of slavery'.
Mr Uddin said during the Awami League government's tenure, he had to pay Tk200 million for road cutting alone to build a 40-kilometre pipeline at his own expense for supplying gas to his industrial plant.
"I even had to pay bribes to pay that Tk200 million," said Bashir, who is the former CEO of Akij Bashir Group.
He urged the businesses that now they do not need to pay bribe and should take the opportunity to lay the pipelines at own cost to make gas available to their factories.
He also said the power sector is corruption-prone, made by design to make businesses subordinate.
The commerce adviser also said, "I have heard the energy adviser [Fouzul] say at a meeting that the energy sector is a pillar of criminalisation and corruption. We have to get out of it."
BCI President Anwarul Alam Parvez said Bangladesh's industrial sector is facing a sharp slowdown, with growth falling from 10.29 per cent in FY 2020-21 to just 6.66 per cent in FY 2023-24 and a mere 3.98 per cent in the April-June quarter.
He said private-sector credit growth dwindled, FDI dropped 15 per cent to $300 million in July-September 2024, and export earnings fell from $43.36 billion in FY 2022-23 to $40.81 billion in FY 2023-24.
"Rising costs are exacerbating the crisis: gas prices have surged 286.5 per cent over five years, while electricity, diesel, and transport costs have risen by 33.5 per cent, 68 per cent, and 50 per cent, respectively."
He said 200 factories had already been shut and 300 more factories were on the way to shut.
He said the combined effect of these challenges is eroding profitability, stifling investment, and threatening the sector's role as a driver of economic growth.
"Without decisive intervention, Bangladesh's industrial momentum risks grinding to a halt," he said.
Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB) President Syed Nasim Manzur said job creation is the single-biggest problem in every economy in the world, including Bangladesh.
He said Bangladesh only can create job from industrialization.
"But, at this moment, the industries are shredding jobs, not creating jobs," he told the meet.
He said Indian textile industry creates 45 million jobs and BPO and IT sector creates 5.4 millions, leading the world.
He said industrial hubs in Narayanganj, Savar, Ashulia, Gazipur have been suffering from energy crisis.
He called for not using system loss by sugarcoating the theft of industrial gas.
"Theft has to be stopped from tomorrow and we want to see some exemplary punishment for the offence," he said.
He also stressed the need of continuation of using coal in the power plants.
Noted businessman Abdul Awal Mintoo alleged that statistical data in the country are fact-based.
"The data need to amended for proper planning," he said.
Speaking at the event, Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) Chairman Zanendra Nath Sarker said an offshore- bidding tender will also be opened on 9 December.
"We hope to sign an agreement with a world-renowned fuel company for offshore gas early next year."
He further said there is a huge potential for gas discovery in various parts of the country, including the hilly areas. Preparations are underway to open an onshore bidding to explore gas in these areas.
Zanendra expressed hope that onshore bidding could be conducted by next March.
Noted businessman Mir Nasir Hossain said power sector was the centre of criminalization in the country during previous government.
"All the oligarchs have been created from this sector," he said.
Former FBCCI President Abul Kalam Azad said many factories are on the way to relocating from China due to tax imposition by the Trump government.
"Bangladesh needs to accommodate them and policy reform in the power and energy sectors is urgently required," he said.
Professor of BUET Ijaz Hossain presented the keynote at the seminar. He placed a set of recommendations, including adoption of a gas- utilization policy that aligns with current realities, while ensuring long-term reliability and sustainability.
To address immediate challenges, he emphasized the need for uninterrupted power supply to feeders serving predominantly industrial customers.
He also called for enhanced gas supply to industrial zones, proposing a comprehensive pipeline- network analysis to prioritize these areas.

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