Bangladesh has lost around Tk 1,200 crore in missed savings over the last one and a half years due to the delay in commercial launch of a dual pipeline that can carry imported oil directly from Cox's Bazar's Maheshkhali to Patenga in the port city.
Though construction of the pipeline under the Tk 8,300-crore Single Point Mooring (SPM) project was completed in March last year, the government has not been able to find an operator, leaving the facility idle.
According to the Development Project Proposal, once implemented, the SPM project would save Bangladesh Petroleum Corporation (BPC) around Tk 800 crore annually in fuel transportation costs.
The delay stems from the interim government's decision not to give the job to any company without a tender, as well as the failure to select a qualified operator through a tender, said officials at BPC and Petroleum Transmission Company Limited (PTCL).
Moreover, 44,000 tonnes of fuel oil worth around Tk 300 crore have remained stuck in the 220km dual pipeline since March last year.
Moni Lal Dash, senior general manager (commerce and operations) at the BPC, said the corporation currently lacks the skilled manpower required to operate and maintain the pipeline.
About fuel oil stuck in the pipeline, he said the low water temperature beneath the sea surface would help preserve the fuel quality.
The project was aimed at serving as a less expensive, secure and environment-friendly mode of transporting imported fuel. Bangladesh requires seven million tonnes of fuel per year to meet domestic demand, with imports accounting for 90 percent -- 65 percent of which is diesel.
Currently, imported fuel is offloaded from mother vessels and carried onshore through lighter vessels. It is time-consuming, costly, and risky, said BPC officials.
When contacted, AKM Azadur Rahman, director (operations) of the BPC, said there are concerns about both financial losses and potential damage to equipment due to the long delay in bringing the pipeline into service.
Seeking anonymity, a top BPC official told The Daily Star, "With the dual pipeline sitting idle, BPC had to spend around Tk 3.5 crore on its maintenance."
Officials at PTCL and BPC said they were unsure about when it will come into operation as the latest international tender for selecting an operator was called off in the last week of September, with all participating firms getting disqualified for various reasons.
Md Raihan Ahmed, managing director of PTCL, said that of the several companies that participated, only two met the criteria.
"Later, one was disqualified for technical reasons and the other for financial weaknesses. We have forwarded a proposal to the energy ministry for calling a fresh tender," he said.
Rahman said that following the tender's cancellation, China Petroleum Pipeline Engineering Co Ltd and Indonesia's Pertamina Refinery wrote to the energy ministry through their embassies, seeking to operate the pipeline under government-to-government (G2G) arrangements.
Approved in November 2015, the SPM Project was implemented with funding from China.
China Petroleum Pipeline Engineering Company Limited (CPP) laid the 220-km dual pipeline -- 146km offshore and 74km onshore -- to transport fuel oil to Patenga from a floating buoy, 16km off the coast of Maheshkhali.
Two 36-inch diameter pipelines will carry fuel directly to Eastern Refinery Limited (ERL) in Patenga via a storage tanker in Maheshkhali.
Upon completion, CPP expressed interest in running the pipeline for three years, and the then Awami League government showed willingness to give the Chinese company the job without a tender.
However, upon assuming office, the interim government opted to float an international tender.
Mohammad Lokman, former managing director at ERL, said, "A Tk 8,300- crore facility remains idle without any economic return. Moreover, fuel oil worth around Tk 300 crore is stuck inside the pipeline."
He also warned that equipment could be damaged if the facility remains idle for an extended period. "Some pieces of machinery need to be operated continuously; otherwise, they become inoperative."
SHIPPING CORPORATION WANTS TO OPERATE PIPELINE
State-owned Bangladesh Shipping Corporation sent a proposal to the energy ministry through the shipping ministry on June 19, expressing its interest in operating the pipeline with assistance from a third party.
Commodore Mahmudul Malek, managing director at the shipping corporation, said they sought to run the pipeline under the Direct Purchase Method (DPM).
"Since the shipping corporation is a state-owned enterprise, we could not respond to the international tender," he told The Daily Star.
Asked, Rahman, director (operations) of BPC, said, "I am not aware of any proposal from the shipping corporation."
About the shipping corporation's plan, Malek said they intend to run the pipeline through an experienced foreign operator for the first few years.
"Working with a foreign organisation will help us build skilled manpower. Eventually, we will be able to assume full control of operations," he added.