Flaws in PP, red tapism may delay handover

Flaws in project proforma and bureaucratic tangle are likely to make the handover of the Madhyapara Hardrock Mining Project uncertain from the foreign contractor, due in 2001, reports UNB.

The uncertainty loomed as the original PP kept no provision for necessary local manpower that has to be trained, a lapse later followed by usual bureaucratic red tapism delaying the process of recruitment for the project.

As per the contract, the North Korean company, NAMNAM, which is developing the Madhyapara hardrock mine, was to train 20 local people in Korea and 320 people locally by 2001 when the project will be handed over to Petrobangla.

But the condition to train up manpower, scheduled to begin in June, 1996, could not be fulfilled as the Petrobangla failed to supply personnel to the contractor for their training.

As per the PP, training for the 20 people in Korea will begin next May and for another 320 local people will commence from October this year.

When contacted, a source in the Ministry of Energy and Mineral Resources said there was only 23 officers in the approved PP and total number of local employees for the project was only 74.

The supply of personnel for training in North Korea became impossible in time as the project having a limited number of manpower cannot spare 20 people at a time.

However, the concerned authorities submitted a revised PP in January last year suggesting a raise in the local manpower, but ECNEC instead formed a five-member secretary level committee to have a fresh look into the viability of the project.

The committee, headed by the finance secretary, is yet to submit its report, making fresh recruitment uncertain and causing a potential setback in the timely handover of the project to the Petrobangla.

"This delay might force Petrobangla to go for a new agreement with the foreign contractor to run the project and that would cause a serious financial setback for the project," said an Energy Ministry official.

The Madhyapara hardrock was discovered in 1974 and the government finally signed agreement with the North Korean company on turn-key basis in 1994 to mine out 16.5 lakh tons of hardrock annually.

The total project cost was estimated at 152 million US dollars - 134 million dollars in foreign exchange and 18 million dollars in local currency.

Out of the 134 million dollars foreign exchange component, 120 million dollars were received as supplier's credit, to be repaid within 15 years.

The reserve is unlimited, but the project officials said the amount of hardrock that can be mined at a cost-effective rate has been estimated at 174 million tons.

The production cost of hardrock has been estimated at 10.77 US dollars per ton while the selling price fixed at 23 US dollars per ton. The mine's annual output will be 1.6 million tons.

When contacted, an official at the Madhyapara Hardrock Mining Project told UNB that the present annual requirement of hardrock in the country is 3.4 million tons. Of this, 1.5 million tons can be collected from quarries in Sylhet, Dinajpur and Rangpur areas.

But the country's four main hardrock consumers - Bangladesh Water Development Board (BWDB), Bangladesh Railway (BR), Roads and Highways (R&H), and Local Government and Engineering Department (LGED) - will be requiring 7.36 million tons at the end of 2000.

A local trader said the actual requirement of hardrock in the country is around 10 million tons, if the consumption in building construction, finished products made of stone and other sectors is taken into account.

Meanwhile, another source pointed out that if the Madhyapara mine could be developed earlier, the construction cost of Jamuna Multipurpose Bridge would have been much lower due to low price of stones.

The contractors for the bridge had to import hardrocks at much higher prices from India, Nepal, Bhutan and Indonesia.

Indonesian hardrock costs 87 US dollars per ton while Indian hardrock costs about 34 dollars.