Bangladesh and China yesterday signed a $550 million framework agreement for loan that will be used to implement a petroleum project with a view to ensuring energy security for the country.
Under the project, crude and finished petroleum products will directly be taken to the Eastern Refinery in Patenga of Chittagong from the deep sea by way of two pipelines.
At present, the petroleum products are unloaded from big ships and taken to the port in small ships. It is then taken to the refinery by oil tankers.
In the previous system, 12 days were needed to take petroleum products from the ship to the refinery.
Once the pipeline is built, the products will reach the refinery in 48 hours, said Nasrul Hamid, state minister for power, energy and mineral resources, at the agreement signing ceremony.
“It will not only save us time but also $100 million a year,” he added.
The work for implementing the project titled -- Installation of Single Point Mooring with Double Pipe Line -- will start in January next year.
The project is one of the 27 that the Chinese government agreed to finance during its premier's visit to Dhaka in October last year.
Xi Jinping had promised to give soft loans of about $21.5 billion for 27 projects.
But the implementation of the projects has not been smooth, said Kazi Shofiqul Azam, secretary of the Economic Relations Division.
As of now, framework agreements have been signed for a total of three projects, including the Single Point Mooring one.
The other projects are: the Development of National ICT Infra-Network for Bangladesh Government Phase III ($157 million) and Modernisation of Telecommunication Network for Digital Connectivity ($231 million).
The government's loan disbursement target for this year is $7 billion, $1 billion of which is supposed to come from China.
“It will be challenging but if the two sides work efficiently it can be done,” Azam said.
The last step for implementing any project with Chinese loans is the signing of the loan agreement.
The loan agreement for a project has already been signed and the one for Single Mooring Project will be inked soon, according to the ERD secretary.
About the perception that the China-funded projects are moving slowly, Chinese Ambassador Ma Mingqiang said the decision-making process is time-consuming.
“It is not that we can say something today and do it overnight,” he said, adding that there are many layers of evaluation and administrative team work.
Sometimes the bureaucracy does not help matters either, he said, while citing the release of a Chinese shipment from Chittagong Port that took 11 months as a case in point.
“These slow down the pace of projects,” he said, adding that both the Chinese and Bangladesh sides are working hard to push the implementation of the projects forward.