Industrial units get new gas connections
The government in a major move has decided to provide new gas connections and additional load to over 354 industrial units after a pause of about six years.
The call has long been demanded by businesses and investors, who put their investment plans on hold for this. The development will also provide a helping hand as the economy looks to move to the 7 percent growth trajectory.
“Though late, it's a great decision,” said Shahidullah Azim, vice-president of Bangladesh Garment Exporters and Manufacturers Association.
The decision, which was taken last month by a committee headed by Prime Minister's Power and Energy Advisor Tawfiq-e-Elahi Chowdhury, will go on to create nearly four lakh new jobs and raise annual exports by $1.5-$2 billion, Azim said.
The government had stopped giving gas connections to industries in July 2009.
The suspension has not only piled up applications, but also hurt banks and entrepreneurs, who invested their money in setting up factories and were forced to run the plants on costly diesel generators in the absence of gas connections.
Over 2,000 applications are now pending with distribution companies for new gas connections and load increase, meaning many factories will still remain unconnected.
Yet, it is positive news for businesses that the government is going to provide new connections to over 300 industries, said Abdus Salam Murshedy, managing director of Envoy Group, one of the lucky units to be getting a boost to its gas supply.
Envoy Group, which exported around $300 million worth of apparel last year, is moving fast to set up a third spinning unit at a cost of around Tk 450 crore in preparation.
As per the latest decision, industrial units under Titas Gas Transmission and Distribution Company will get 160 new connections and 139 additional loads.
Karnaphuli Gas Distribution Company in Chittagong will give 11 new connections and 12 additional loads.
Bakhrabad Gas Distribution Company will provide 12 new connections and five additional loads.
Eight new connections and seven additional gas loads will be provided to industrial consumers under Paschimanchal Gas Company.
Most of these new connections and additional loads have been approved for the textile, garments, steel and ceramic sectors, according to Petrobangla.
Private sector credit growth will increase significantly riding on these gas connections, said Touhidul Alam Khan, deputy managing director and chief business officer of Prime Bank, one of the largest private lenders in the country.
At the end of fiscal 2014-15, private sector credit growth went down to 13 percent from over 25 percent three years ago.
Many bankers attributed the credit downfall on poor infrastructure, particularly no new gas connections to industries.
Petrobangla's website showed that the country produced 2,702 million cubic feet of gas on Wednesday. The production is short by 500-600mmcf against the country's daily demand.
Energy Secretary Md Abubakar Siddique recently said they have no problem in providing new connections as an additional 125mmcfd-150mmcfd is required for 354 industrial units.
He said all the fertiliser factories had been shut down as a part of the government gas rationing programme and, if necessary, the government will reduce supply of natural gas to the power plants to facilitate supply of the fossil fuel to industries.
Production from Bibiyana gas field is set to increase by 300mmcfd, said a Petrobangla official.
The committee also decided not to provide any new connections to CNG stations that consume around 5 percent of the country's total gas production. Captive power plants in factories will also not be given new gas connections.