BPC again seeks time, funds
The deadline for the "Installation of Single Point Mooring (SPM) with Double Line" project will be extended for the fourth time with the cost to be raised by around Tk 1,000 crore, or 15 percent, according to the Planning Commission.
On behalf of the Bangladesh Petroleum Corporation (BPC), the implementing agency Eastern Refinery Limited (ERL) recently proposed revising the project cost to Tk 8,222 crore and extending its deadline by one year.
The BPC said more time and money is needed to complete the project due to issues resulting from the higher price of US dollar, which include increased payments for foreign contractors and consultants.
The proposal was placed at a meeting of the Project Evaluation Committee (PEC) of the Planning Commission on Tuesday, sources said.
During the meeting, the Planning Commission raised various questions, asking for an explanation from the BPC as to why the project tenure should be extended until June 2024 even though implementation has reached 97 percent physical progress.
If approved, the new total cost would be 67 percent higher than the original of about Tk 4,936 crore. In the first revision, the cost was raised to Tk 5,426 crore while it increased to Tk 6,568 crore in the second revision.
The third revision took the cost to about Tk 7,125 crore and extended the deadline to June 2023.
The project taken by the Ministry of Power, Energy and Mineral Resources in 2015 was initially scheduled for completion by December 2018.
The initiative is being funded by the Exim Bank of China, government exchequer and BPC's own finance.
The project aims to facilitate the unloading of imported crude oil and finished products with improved safety at a low cost and within a short time.
As such, it aims to reduce system losses experienced in the existing lighterage operation of imported crude oil and finished products, according to project documents.
The SPM will be able to unload 120,000 tonnes of crude oil from tankers in 48 hours and 70,000 tonnes of diesel in 28 hours.
Under the project, three oil depots for crude oil and three storage tank farms for diesel will be set up at Moheshkhali in Cox's Bazar to ensure energy security by enhancing the country's capacity to store fuel.
The project will establish a SPM and Pipeline End Manifold, set up a total of 110 kilometres of offshore and onshore pipelines, tanks and farms at Moheshkhali as well as carry out land acquisition.
In a written statement, the BPC said they have to spend an additional Tk 537 crore for the project due to the fluctuation of the US dollar, and $3.5 crore for the claim settlement of contractors and consultants.
However, they have to pay another Tk 59 crore to the government due stipulations of the recent circular on income tax and value-added tax on the payment of contractors and consultants.
Project Director Md Sharif Hasnat, also a deputy general manager at Eastern Refinery, could not be reached over phone for a comment by the time this report was filed.
"We have scrutinised the project and raised our queries at the PEC meeting," said Abdul Baki, member (secretary) of the industries and energy division of the Planning Commission.
"The project is almost complete but due to fluctuating dollar prices, they have to pay almost all of the proposed amount. Apart from that, the BPC has some claims from contractors and consultants," he added.
Baki also said they raised some specific observations in the PEC meeting and asked the BPC to submit relevant documents soon.
"The project is very crucial for the country. If the project is launched, it will save a huge amount of money for the government," he added.
In a recent program, State Minister for Power, Energy and Mineral Resources Nasrul Hamid said the SPM project is near completion.
"We have built 110 kilometres of pipeline from Moheshkhali to Patenga, which will save us about Tk 1,000 crore a year," he said.
"We will supply fuel from Patenga to Dhaka through another pipeline, which is also almost complete," Hamid added.
The pipeline was already commissioned in July, but later faced technical glitches and failed.
The state minister hoped they would be able to inaugurate it in October this year while BPC officials also hoped to open the project within the next two-three months.