<i>A mine of corruption</i>

Barapukuria coal mine development project, implemented under a Chinese Supplier's Credit scheme, remains one of the significant cases of corruption by some policymakers, officials and a business house during the tenure of two governments headed by Khaleda Zia.
Instead of making profit, this coal mine project forced Bangladesh to accept about 100 percent cost escalation to Tk 1,600 crore from Tk 887 crore as well as reduction of coal production capacity to only seven lakh to one million tonnes a year from two million tonnes. And the cost of coal production per tonne was estimated at $35 but now it is around $90. Plus, the project is more than eight years behind schedule.
All this happened to ensure "business" for certain individuals. From last year, the government however is trying to revamp the mine project with help from the Chinese government.
While this sketchily made deal imposed a huge financial burden on the government, the authorities could never ensure proper monitoring of the project implementation as Hosaf group -- a close ally of the two BNP governments-- acted as representative of the project's Chinese developer CMEC and also of British consultant IMCL.
Owned by Moazzem Hossain -- one of the accused in the Anti-Corruption Commission (ACC) case -- Hosaf also represented the developer of over-priced 250 megawatt malfunctioning coal-fired power plant.
Interestingly, Hosaf also represented in one way or another all the three Chinese companies that participated in the 2003 tender for production, management and maintenance of Barapukuria coal mine, in which the ACC detected corruption.
The seeds of corruption in this project was sown in the nineties. The Daily Star investigation into how the project was devised found that policymakers had asked officials to tamper with economic basis of the mine to show it as a profitable project.
The then energy minister Khandker Mosharraf Hossain worked specially hard for this project while Hosaf mediated negotiation on the flawed Supplier's Credit from China.
Sources say a senior BNP policymaker was bribed Tk 30 crore in the early nineties for the deal.
The mine project was supposed to be completed before 2000 but till 2004, the CMEC could not do so.
As the original contract did not ensure transfer of the mine's Chinese technology to Bangladesh, the government had to assign a Chinese company to run it. Once again, Hosaf played a role in the tender in 2003. In 2004, the cabinet purchase committee awarded this contract to Shandong Ludi Consortium of China as the lowest bidder. Represented by Hosaf, Shandong later asked for cost escalation, and the government then gave the project to CMEC-- the third lowest bidder-- by skipping the second.
The Ecnec approved Barapukuria project proposal in March 1992 with the target of completing it on July 31, 2001 at a cost of Tk 887 crore. But the project was suspended when sub-soil waters started gushing in at a rate of 700 cubic metre from April 5, 1998 at a depth of 1,100 feet. This happened because of design flaws, according to official sources.