The Single Level Mooring (SMP) challenge at Maheshkhali, Cox’s Bazar, became executed in March this year, nine years after being initiated by the advise-owned Bangladesh Petroleum Company’s Eastern Refinery Exiguous. A pair of opinions prolonged the challenge’s timeline, whereas factors akin to additional components, taxes, and commerce rate fluctuations elevated its price to Tk8,222 crore, up from the preliminary estimate of Tk4,936 crore.
Building began in 2019, funded by a $550 million Chinese language preferential loan, repayable over Two decades with a 5-year grace duration. The challenge underwent a trial trot in July last year, nonetheless a important technical suppose delayed its commissioning until March this year.
The sea-to-shore floating terminal became designed to seamlessly switch imported gas oils from mother vessels to storage tanks and refineries to lower transportation time and freight charges. The China-funded challenge is expected to place around Tk800 crore each and every year by cutting time from 11 days to two days to switch 1 lakh tonnes of gas oils by chartered lighterage vessels that price Tk66 crore per 30 days.
Below the challenge, six storage tanks were constructed in Maheshkhali in conjunction with a ability of 2,00,000 tonnes to Eastern Refinery, enabling it to stockpile oil for two and a half months’ need – offering a buffer for supply disruptions.
It is now eight months because it became commissioned in March 2024. Nonetheless the specified benefits so a ways can’t be reaped as the ready-to-exhaust terminal, fitted with 110 km double pipelines, does now not enjoy an operator yet. The quick past authorities, armed with the Immediate Enhancement of Electrical energy and Vitality Present (Special Provision) Act 2010, became within the strategy of enticing China Petroleum Pipeline Engineering Firm Ltd, which constructed the SPM, as its operator.
On condition that local operators weren’t geared up to address a challenge of such complexity and scale, the Awami League authorities planned to nominate a global operator to regulate the SPM successfully after its commissioning, officials from the advise-owned agency BPC told The Industry Customary in October. At the beginning, the notion became to hire a international operator for 18 months, until local skills would perchance maybe maybe be educated to take over the SPM’s operations.
Since the Chinese language builder itself equipped to are trying it for 3 years, the then authorities became in favour of giving it the job below the 2010 Special Vitality Security Provision Act that allowed the signing of such unsolicited contracts within the energy sector.
Nonetheless the technique bought caught after the abrupt 5 August descend of Sheikh Hasina’s regime by intention of a student-led mass uprising.
Quickly after taking space of job, the interim authorities suspended particular energy safety provisions amid criticism and controversies around unsolicited energy and electricity projects.
Tricky on renewable, comfy on dirty gas
In September, the energy ministry determined to scrap 31 unsolicited renewable energy projects awarded by the previous authorities below the identical act. Entrepreneurs acknowledged the dedication assign funding proposals worth about $5 billion in neat gas electricity projects at stake. They claimed $200 million became already invested in land acquisition and other challenge-linked steps.
If applied, the renewable energy vegetation in these projects would enjoy generated 2,678MW of neat electricity and saved almost $820 million (Tk9,700 crore) each and every year in energy payments, in step with a gaze by the Bangladesh Sustainable and Renewable Vitality Affiliation (BSREA).
In the meantime, the interim authorities has formed a nationwide committee to learn about all unsolicited energy deals signed below the Special Provision Act.
Vitality Adviser Muhammad Fouzul Kabir Khan told TBS in early September that new tenders would be called and selected ones would be given a plug-forward.
Starting up the restful process afresh would perchance maybe maybe take at the least a year, leading to investors’ frustration and discouragement, warned renewable energy entrepreneurs who had shared their concerns with the energy adviser and requested to support them continue the projects.
On 30 November, the energy adviser at an match in Dhaka acknowledged a brand recent policy became being developed for the renewable energy sector as he found the previous policy became now not properly applied. On the identical day, the interim authorities repealed the Special Provision Act nonetheless declared all existing contracts made below the Act would stay exact.
Earlier than that, on 20 November, the Advisory Council Committee on Financial Affairs, chaired by Finance Adviser Dr Salehuddin Ahmed, selected China Petroleum Pipeline Engineering Co (CPPEC), the identical Chinese language advise-owned agency that constructed the BPC’s single point mooring challenge to are trying and defend it.
It approved in precept the proposal, submitted by the Vitality and Mineral Sources Division, below the converse hang components.
Officials acknowledged the detailed proposal would perchance be reviewed within the upcoming meeting of the Advisory Council Committee on Authorities Aquire.
What produce procurement regulations hiss?
Industry insiders hiss the BPC’s are trying and award SPM’s operation and management companies and products on to an unqualified contractor goes in opposition to the interim authorities’s declared stance in opposition to unsolicited energy projects as reflected within the cancellation of the actual act. Contracting out a ready challenge to a sole source contractor also does now not discover the present Public Procurement Regulations (PPR) and public-deepest partnership (PPP) rules, they perceive.
“Even supposing procurement below the Special Provision Act is purported to were shunned, it appears the Ministry of Vitality is making an are trying to exercise the identical de facto energy and award the Operations & Upkeep (O&M) contract, with out restful, for the Single Level Mooring to a Chinese language firm within the guise of a concocted G2G plan,” no doubt one of them told TBS, wishing now not to be named.
The Chinese language firm CPPEC, chosen for the work, became favoured by the previous advise minister of energy and the then Awami League authorities earlier this year floated a younger for the O&M with a file that became designed the truth is for CPPEC handiest, the insider accustomed to the technique acknowledged.
“Regrettably, nonetheless, as a replacement of issuing an start restful, BPC proceeded to craft a plan to award the contract to CPPEC on a sole source basis, satirically appropriate as conceived by the previous authorities,” he acknowledged, questioning the energy ministry’s justification that BPC and CPPEC, both being advise-owned enterprises, can plug for an quick G2G award, bypassing start restful process.
Of their recommendation, the energy ministry and the BPC claimed that such G2G converse procurement is approved below Public Procurement Solutions Clause 75.0 and 76.2 and the Public Non-public Partnership Act.
“We reviewed Article 75.0 and 76.2 of the PPR and linked sub-articles, which list various cases below which converse contract would be made, nonetheless curiously G2G is now not mentioned or referenced in any form or possess within the referenced clauses of the PPR,” the insider acknowledged. The G2G thought became certainly incorporated in PPP supplementary gazette issued in 2017 and the energy ministry misrepresented the facts to the advisory council’s committee by “conflating the PPR & PPP and obfuscating the illicit nature of the award”, he acknowledged in a written text despatched to TBS.
Explaining G2G requirements below PPP Solutions and PPP, he acknowledged the G2G Partnership gazette states that GoB would perchance maybe at as soon as have interaction with other governments and perceive their enhance to implement projects on a PPP basis.
The Bangladesh authorities did now not have interaction with the Chinese language authorities concerning the O&M challenge and did now not quiz China for any monetary enhance or funding. The challenge is purely financed by the Bangladesh authorities. CPPEC is now not making any funding, as required below PPP. Thus, this challenge does now not meet the requirement to be classified as PPP, he pointed out, revealing that no G2G framework settlement or memorandum of figuring out became also signed between the two governments required below the G2G Partnership Protection for PPP projects.
He renowned that the energy ministry is environment a unhealthy precedent where any advise-owned entity can contract with any Bangladesh authorities agency and claim that the contract is also awarded with out restful below the guise of G2G. In China, there are extra than 350,000 advise-owned entities and in Bangladesh 30-50 such Chinese language entities produce enterprise, he pointed out.
“We have also found out that CPPEC has no skills in any admire in endeavor O&M of SPM – now not even a single challenge,” he acknowledged, anxious BPC’s claim that CPPEC has “commissioning” skills of offshore pipelines in Angola and Abu Dhabi.
“Our investigative evaluate leads us to slay that CPPEC is certainly NOT doing the O&M for the Weizhou terminal as claimed,” the enterprise insider acknowledged.
The O&M of SPM is highly advanced and poses many dangers, and the probability of handing over custody of such an important infrastructure of nationwide curiosity to an “inexperienced and amateur contractor” is also very grave, he warned.
“As an substitute of investigating the repeated label raise of the EPC contract below the previous regime, it appears that primarily the most contemporary authorities needs to additional reward the identical transgressing actors,” acknowledged the insider, who thoroughly examined the contract process, relating to price escalation of the SPM challenge.
Authorities procurement officials, nonetheless, acknowledged even when the Special Provision Act has been repealed, existing rules also enable the authorities to pass for converse contracts on sure cases.
“Creep, PPR 2008 stipulates that the converse procurement components is allowed for the operation of a challenge by the builder/contractor. While you occur to compose a port as a contractor, you may maybe accept the operation contract by intention of DPM, equipped that CCEA approves it,” acknowledged a venerable senior government of the PPP Authority.
Aloof, there may be now not the kind of thing as a G2G kind out China in PPP, the official told TBS.
Mohammed Shoheler Rahman Chowdhury, venerable director identical old of the Central Procurement Technical Devices, now the Bangladesh Public Procurement Authority, shared a identical standpoint.
He acknowledged the authorities procurement regulations affords such opportunities, nonetheless it completely is well-known to assess to whom the contract is being awarded. It is advanced to search out out the causes leisurely selecting a explicit firm with out reviewing the linked paperwork. Every so veritably the dedication is justified, whereas at other times it’ll now not be.
The linked authorities are most efficient positioned to stamp why a firm is selected with out an start restful. In such cases, it be important to clutch their rationale, and if it aligns with the rules and rules, it’ll even be favorite. Otherwise, appointing a firm with out a younger would now not be acceptable, Rahman added.
