Artificial crisis of bamboo cuts production | The Daily Star
12:00 AM, December 04, 2010 / LAST MODIFIED: 12:00 AM, December 04, 2010

Karnaphuli Paper Mills

Artificial crisis of bamboo cuts production

A huge stock of bamboo near the Karnaphuli Paper Mills but the factory is running at one-third its capacity, as suppliers demand high price for the raw material.Photo: STAR

Two units of Karnaphuli Paper Mills are shut down due to an 'artificial crisis' of raw material, bamboo, allegedly created by a vested quarter.
Incurring a loss of about Tk 3-4 lakh a day, the factory is now producing 30-40 tonnes of newsprint using just one unit. The factory is capable of producing 100 tonnes a day, said Mostofa Mian, its administrative manager.
Since June, the factory authorities have floated six tenders to procure bamboo. It was done during the peak of bamboo harvesting season.
But every time the bidders, who stockpiled huge amounts of bamboo at Jettyghat nearby, quoted exorbitant prices surpassing the highest estimate of the factory.
"Last year the price was Tk 4,500 per tonne. This year they are quoting Tk 5,777 for a tonne, which is much more than the price fixed by the government," said Zahirul Haque, managing director of the factory.
The Daily Star enquired about the price of a tonne of bamboo and found that the contractors are buying a tonne at less than Tk 2,500.
During the bidding on October 28, Raja Mia, a long-time supplier, allegedly manipulated the bidding in which only two bidders took part. Quoting Tk 5,777 for a tonne, Raja Mia's bid was 'the lowest' with Ashish Enterprise quoting Tk 5,885.
"The bidding itself is a testimony to the manipulation," said a staff of the factory requesting anonymity. The staff added, "Raja Mia already has monopoly, stockpiling the raw material; he is now trying to compel the authorities to buy the material at a high price."
Manikaloy Barua, general manager of the factory, said they had floated an open tender so that all contractors could take part but surprisingly there were only two participants.
MD Zahirul Haque said, "We may buy raw material at only 10 percent more than the price estimated by higher authorities."
"I cannot accept any higher rate quoted by the contractors," Zahirul said, adding that he will discuss the matter with higher authorities to resolve the crisis.
A factory staff alleged that Raja Miah has a secret deal with some key officials that ensures his supply of 120,000 pieces of bamboo to the factory.
Raja said he has been supplying bamboo to the factory for many years. He said his involvement in the supply chain does not prove any secret deal.
He said the scarcity of bamboo and high demand are the reasons for spiked prices this year.
A staff of the factory said, "The factory authorities should bear in mind that the stockpiled bamboo at Jettyghat is rotting, so the contractor has to sell it off as soon as possible."
Abdus Sattar, a bamboo trader, said, "There should not be any crisis at this time because this is the best season for collecting bamboo. Water level of the Kaptai Lake is high and accessibility to the mountains through the waterways is wide open now."
Basically, supply drops during dry season when water in the lake reduces drastically, and bamboo cannot be transported from remote areas at that time, he added.
Md Jahidul Kabir, divisional forest officer (DFO) of Pulpwood Plantation Division at Kaptai, said they have adequate pulpwood gardens for supplying raw materials to the factory. Contractors selected by the factory often fail to deliver on time, he claimed.
On September 22, Rangamati Deputy Commissioner Sourendra Nath Chakrabarty, in an emergency meeting, directed all concerned not to transport bamboo outside the district for the interest of the newsprint factory. Since then, bamboo traders have been stockpiling it at Kaptai Jettyghat.

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