Anatomy of Bangladesh Energy Sector- 1/11 Onwards

Saleque Sufi
Thursday, 11.13.2008, 10:01am (GMT)

On the morning 13th

November 2008
when I got up a little
bit early around 4AM
Melbourne time I
remembered the
horrible experience
Bangladesh had 38 years before on this day. The
previous night I mean night of 12th November 1970
saw the devastation of a massive cyclone and tidal
bore that swept across Bhola and Patuakhali region
killing a million of helpless people and sweeping away
stocks, crops and properties. At that although a mere
sophomore at Government Rajendra College Faridpoor
organised voluntarily whatever we could to rush relief to the marooned survivers.Remember
Nasim, Noufel two of my closest friends whom we lost at the last stage of the liberation
war- (10, December1971) in an ambush of the retreating Pakistan Army from Jessore
Frontiers were with us. We spent a week in the remote char areas – Chor Jabbar and Ureer
Chor for relief woks. Peter Anderson of a voluntary organization provided us substantial
relief materials to distribute also. That was an experience of horror. I do not have language
to accurately describe what we saw. Naturally those memories were haunting me since last
night. Our office starts at 8 AM. From my place it is 40mins Bus+ Train ride. I had enough
time to try and do something useful. So, I Goggled Bangladesh and accessed Central
Intelligence Agency (CIA) of USA Page of The World Fact Book. Let me start this write up
quoting from CIA Fact book of Bangladesh last updated on 6 November 2008.

Quote.
“The economy has grown 5-6% over the past few years despite inefficient state owned
enterprises, delays in exploiting natural gas resources, inefficient power supplies, and slow
implementation of economic reforms. Bangladesh remains a poor, overpopulated, and
inefficiently – governed nation. Although more than half of GDPis generated through service
sector, with rice as the single most important product. Garments exports and remittances
from Bangladeshis working overseas, mainly in the Middle East and East Asia, fuel economic
growth.”
Unquote.

Well CIA is a nosy intelligence agency which is not admired in our part of the world. This
organization worked against our liberation war, is alleged to work against Bangladesh
interest after our liberation war and many belived had a role in August 1975 and November
1975 killings to make Bangladesh orphan of its founding fathers.

Notwithstanding this the summing up of Bangladesh economic situation of CIA at the critical
juncture of our National history merits attention. We consider that there is very little to
argue.

The matter of interest is definitely the comments on delays on exploitation of natural gas
and inefficient power supply. Could we do really anything of note over the last two years of
Neutral (?) Care taker Government to expedite natural gas and make Energy supply
 efficient? Is their any denial that Bangladesh could also
achieve double digit growth of economy if CTG could?
There were no political programs, no confrontation on
the streets. Highly educated PhDs ruled the country
under cover of the Sate of Emergency backed up Lt
General Muinnuddin Ahmed led Bangladesh Armed
forces. To themselves they are angels – can do nothing
wrong. They also listened to dictates of Countries like
USA, EU Countries and some say India. Still why they
failed to identify energy sector priorities? Why did they
fail to cure the contagious diseases of weak and sick
energy sector? The helpless nation can rightly demand
explanation from Dr .Fakruddin Ahmed? 150 Million Bangladeshis did not lease the country
to anyone to earn such adverse comments from an agency which is never considered a
friend of Bangladesh. We hope that CTG will soon hand over power to elected care taker
government. But what kind of economy, what state of Energy scenario they will they leave
behind? Will CTG make some soul searching? Will CTG make some effort to undertake an
accounting of their success and failure? The advisors and their patron talkative Army Chief
very often sounded venomous about political personalities? We know the failures of politics
and political leaders created platform for unconstitutional government to step in. But did
they fare any better in several key areas of national economy? Will CTG leave a paper
stating the reasons for its failure to improve energy situation? Will they leave a white paper
on Energy sector scandals and their failures to bring the mischief mongers to justice? If they
do not do the monsters will again remerge whatever CTG gained in other areas.

The energy situation is much worse than what it was on 1/11. Why CTG failed to improve it,
what are the explanations? We heard about so many tall talks- Nuclear Power Generation,
Joint Venture Hydro Power generation in Myanmar and import, Gas import from Myanmar,
Setting up of Several Large Gas Based Power Plants, Access to spare Power from Captive
Generation, and Petroleum Exploration at Magnama & Hatiya. None less than Secretary
EMRD since early 2007 kept on telling Coal policy will be approved soon. Can we ask how
soon is soon. It is November 2008 and now it appears that Coal policy is going to cold
storage. Why CTG did not deal with Asia Energy Contract and once for all dispel all
controversy for national benefit?
The author has serious reservations about handling of several key energy issues by one
time (may be all time) friend Engr.Mahmudur Rahman (Class mate, Gas sector colleague
and good mate). But there is no denial that he initiated Coal policy formulation and Deep
water exploration efforts. But why tall talking CTG Energy Advisors failed to complete Coal
Policy approval and Engagement of IOCs for exploration in Bangladesh territorial water? Will
someone tell the nation about their failure? How do the chief patron Army Chief look at it?
He should also share the blame as General Massod also created panic in Energy sector with
Joint Investigation excesses. Nation deserves an explanation from Army Chief also
regarding failure of punishing t near energy thieves and harassing some honest person.

Bangladesh now has about 2000 MW deficit in national power grid, about 250MMCFD deficit
of Gas in the national grid. This has widened due to failure of Energy Sector management
under Care Taker Government to bring meaningful changes to improve situation.
Government failed to create other viable option for power generation .Coal exploration still
remains in haze of uncertainness. Natural Gas still remains predominant source .No new gas
field could be discovered over the last two years .In fact no genuine efforts were even
made. Cairn did some works at Magnama and Hatiya. They are now blackmailing
Bangladesh exploiting the helpless situation. They want unfair advantages over and beyond
PSC and GPSA. Cairn, Chevron, Tallow, Total in fact no IOC did any exploration work in their
allotted blocks although gas situation continued to turn
critical. Petrobangla /EMRD also failed to smarten
BAPEX adequately to explore and discover new gas
structures in its assigned areas. On the other hand
Shangu gas field depleted due to inappropriate
production management triggering gas draught in
Chittagong area, Titas gas Field leaked alarmingly
causing concern, further development of Bakhrabad,
Titas, Habiganj, Kaillashtilla remains stagnant. No new
gas transmission infrastructures could be set up to
move stranded gas to demand center. In two years
CTG energy management could not make award for
setting up Gas Pipeline Compressor stations at strategic locations of National Gas grid. The
author feels frustrated as in own time several larger infrastructures could be built much
stressed situation. None in the gas sector now seems to own their works and take pride in
their performances and achievements.

In power sector after cancelling dubious contracts with Belhasa–Orion and Harbin for plants
at Meghnaghat and Chandpoor CTG till now CTG failed to conclude deals for any major
power plant. Its effort at Nabiganj beside Bibiyana and Sirajgonj are entangled with
controversy. CTG ignoring good advice from knowledgeable quarters inked deals with
incompetent developers for cut throat price contingency power plants. Most of these failed
to deliver. New Power plants at Siddhirganj and Fenchuchanj are also having toothing
problems.

If Sheikh Hasina and others can be sued in dubious motivated cases despite of successful
implementations of Barge Mounted plants and AES plants then why sufferers must not take
CTG energy sector management to dock for failures , for wrong concepts and false
assurances? Wonder how and why CTG harassed Elected Prime Ministers and Popular
leaders based on false ill motivated cases filed by known defaulters and suckers. Just
imagine if the two plants of AES – 450MW at Meghna Ghat &360 MW at Haripoor) as well as
Barge mounted plants at Haripoor, Khulna and Baghabari were not initiated by Sheikh
Hasina where would have our energy situation landed now? CTG must now realise it is very
easy to talk big but in a country like Bangladesh managing energy sector infrastructure
development requires vision, patriotism, raw courage and commitment. Despite of some
controversy Awami League Government of Sheikh Hasina managed to initiate several useful
energy projects. Many of which the corrupt inefficient, parochial, narrow visioned, liberation
war values destructing Kahleda Zia – Nijamee government failed to continue. There are no
doubts the care taker government inherited the legacy of the immediate past failed
government. But it did very little to prove that it is any better. You can not grow grapes in
mango trees. Energy sector is for energy professionals and not for civil or military
beauracrats.The sooner we realise the better.

We still think council of Advisors of Care Taker Government must spend one of their
valuable days in discussing Coal policy and Deep water drilling. Both must preferably be
approved now. This will make life of immediate next political government easier. If
necessary, advisors may unofficially dicuss with two king pins of Bangladesh politics about
the two major actions. New government will take at least one year to review and approve
the coal policy and Deep water drilling. This means options for and possibility of improving
the widening energy deficit will be delayed another two years at least. Just imagine what
will be our cumulative loss of economy? Can business leaders, industrial enterpreauners
take initiative to include energy issues in the now probable dialogue of two heavy weights of
 Bangladeshi politics? So called agitators do not have stakes but
business leaders and local investors have? They are main sufferers
of present energy crisis.

CTG can not do much now. They have very little time left in the
office. They even failed to identify real criminals, corrupt persons
of Energy sector, Gas Sector. Several corruption suspects
continued to poison energy sector over the last two years also. For
some days newspapers carried front page news on corruption
suspects of Titas Gas, BGSL and also corruption of Niko deal,
Barapukuria scam. Could CTG close any of these corruption issues
and punish culprits and beneficiaries? Rather some corruption
suspects got rewarded, engaged in elevated positions. Corrupt but
still efficient persons still deliver .But unfortunately Bangladesh
corrupt energy sector management is inefficient too. Bad currency
managed to knock out good currency from circulation. Now energy
sector is in Intentensive Care Unit (ICU) with life support.

Before CTG sign off it must publish a white paper on Energy sector corruption and
anomalies and also state why they failed to bring meaningful changes. We do not want to
see some institution like CIA blame energy sector for non achievement of desired growth
towards achievement for poverty alleviation.

Tsunami, Cyclones and Tidal bore impacts Bangladesh absorbed due to brilliant innovations
of our farmers, hard works of our labour force abroad. But the massive all-round impacts of
diabolic energy scenario emanating from continued failure of successive government may be
unsurmountable for Bangladesh if we fail to treat it as top priority national agenda. Time to
turn around is fast whistling by.

Political Consensus for Energy Sector Development of Bangladesh

Saleque Sufi
Saturday, 12.06.2008, 01:20pm (GMT)

Dr. M. Tamim special Assistant of Chief Advisor of Care Taker

Government only days before General Election 2008 realised
that understanding of two major political front and political
consensus in general is essential for energy sector development
of Bangladesh. He also felt the incumbent government within 6
months of assumption of office must take positive decision on
Coal policy and exploration in the Bay of Bengal. The cruel
realisation by the special assistant came at the fag end of the
almost two years time of a neutral care taker government
which many felt were in a much better position to take these
decisions.

The serious energy crisis – huge deficit of power in national power grid, gas shortage in gas
grid, uncertain situation of gas exploration, confused state of coal exploration have brought
industrial development to almost stand still. There is no denial that Care Taker Government
inherited very uncertain energy scenario left behind by BNP led 4 party alliance
governments. But one compares the energy situation that prevailed prior to CTG take over
with that now prevailing one must conclude CTG energy sector management f also failed
miserably to manage the situation. CTG and its sponsors on many instances blamed wrong
politics, lack of managerial capacity for crisis. There were no poetical programs, possibly no
such massive corruption yet energy scenario id not change appreciably. Demand grew at
much higher rate, additional generation was minimum, no new discovery of major fuel gas
resource achieved .All these compounded the crisis. Moreover, gas supply situation became
so critical due to rapid depletion of Sangu offshore gas field that Chittagong region started
experiencing gas draught. It was expected that Care Taker Government will positively
approach Coal mining creating opportunity for fuel diversification for energy generation. But
for two years CTG energy management kept all guessing and finally let the coal policy
further hibernate. How Mr.Tamim now feels new Government will take decision on coal
policy within 6 months. Due to non action and allowing controversy to take wings CTG is not
leaving enabling situation for the new government. Care Taker Government took positive
initiative for deep water exploration but here also kept the final decision pending. Failure to
start appropriate coal mining and offshore exploration has put paid to the efforts for
achieving security of supply in our energy grid in foreseeable future. Mr. Tamim and CTG
energy sector management must share the blames also.

Mr. Tamim talked about political understanding between major political parties. The track
records, chronological development of events do not encourage one to believe that such
understanding will happen soon in any matter not to speak of Energy sector development
issues. If the election is held finally and nation speak loudly for a political party or front the
winning party must try to address the all contentious issues including energy sector
development activities valuing opinion of the shadow government. The opposition in the
parliament must also realise that energy situation must get top priority attention and must
support government efforts with positive value addition. But elected government must not
hesitate to take positive early decisions.

Energy Bangla is running a poll of opinion among its readers. “Which political party is
capable to improve the energy situation of Bangladesh?” EB mentioned Awami
League, BNP and also none. Now Mr.Tamim in the round table discussion organised by
Energy & Power Fortnightly mentioned requirement of political understanding- political
consensus. We may try to analyse the past performance of two major political parties
particularly in the context of energy sector development activities. The past performance
will definitely give evidence which party performed relatively better in managing energy
sector issues.

For the sake narrowing the area of focus let us consider the period from 1991-2006.
Following fall of autocrat regime in 1990 through combined efforts of two major political
parties basically BNP and BAL were in state power in three terms of democratic government
elected through election under care taker government.Khaleda Zia led the government from
1991-96 and ah again from 2001 – 2006 while Hasina led the government from 1996-
2001. The real time records of power and gas sectors must have been retained by PDB and
Petrobangla. The data, information and records will speak themselves.

BNP government had inherited some controversial international contracts and some
conflicting situations following fall of Ershad regime. But given some controversies Ershad
Government undertook massive energy sector development in its time. Bakhrabad Gas
Systems Ltd developed extensive gas production, transmission and distribution network in
the entire South East Bangladesh. Several new gas wells were drilled at Beanibazar,
Kaillashtilla, Rashidpoor, Habiganj, Titas, Norshindi and Meghna.Major works of North-South
Gas transmission Pipeline was completed. But there were some major corruptions in
Scimitar Scandal – leasing out extensive area of Sylhet to a dubious company Scimitar,
mismanaging contract with Saipem for North South Pipeline .Award of contract to Spie –
Capag for Brahmaputra Basin Pipeline, Contract with KAFCO.

BNP government handled the Scimitar issue appreciably but they were culprit in w waring
potential exploration blocks 12, 13 & 14 of Surma Basin in similar non transparent manner
to another tiny tot Occidental .This also include a Petrobangla owned Jalalabad Gas field
violating the visions and conditions of Draft PSC of not awarding any discovered gas field to
IOC. Saipem syndrome had massive scam .BNP energy sector management was the major
beneficiary. BNP started two economically non viable mining projects on supplier’s credit –
Barapukuria Coal mining and Madhyapara Granite mining. A strong mafia group aligned with
BNP regime were the beneficiary. During this time inappropriate production management of
Bakhrabad gas field caused massive crisis .Bakhrabad Gas field structure got damaged.
Chittagong area experienced almost gas black out. Nation suffered massive brown out. In
2005 – 2006 the country experienced 5-6 hours load shedding almost regularly. BNP
government failed to proceed aggressively to conclude contract for Procurement &
Construction of Ashuganj – Bakhrabad Gas pipeline to complete national gas transmission
Grid on the eastern side of Jamuna and move gas from gas surplus Sylhet region to gas
deficit Chittagong region. River. Violating all norms of procurement guidelines an ill
motivate energy sector group tried to award the contract to a consortium of local
contractors. But World Bank treated it to be mis-procurement an threatened to withdraw
funding. BNP government finally had to accept the reality and ward the contract to the
evaluated lowest Australian contractor McConnell Dowell. But BNP during its time failed to
make significant progress of the project. BNP also failed to set up required number of power
plants to meet the demand. When BNP handed over power to Care Taker Government there
were severe power supply crisis, gas shortage in the gas grid. Power plants and Fertilizer
plants in Chittagong were to be kept shut down. The then PM Khaleda Zia declared to drill at
least 4 exploratory wells every year but during 1991-96 one make check how many wells
were drilled. Khondkar Musharraf Hussain, Energy Minster at that time was alleged to be the
main mischief monger and main beneficiary of energy sector corruptions at that time.

Sk Hasina led Awami League Government ruled the country from 1990-2001. The
government took up energy sector recovery as one of its main challenge. Implementation of
Bakhrabad –Chittagong Gas Transmission Pipeline was given High priority national
attention. We the field regiment of GTCL led a relentless battle in the low lying Titas , Gumti
low lying flood prone basin to complete 58 KM 30” OD concrete Coated High Pressure
pipeline within 5 months of assumption of office of Hasina Government. PM herself used to
monitor the day to day progress. So by May 2007 normal service resumed in gas hungry
Chittagong area. Massive development activities at all segments of energy value chain
changed the scenario in 3 years. A list of successful energy sector development activities
will evidence how Government of Sheikh Hasina [performed lot better than Khaleda Zia led
BNP government

• Development of Jalalabad Gas Field by Occidental/Unocal and Commencement of

Gas/ Condensate Delivery from Jalalabad Field to National Gas/Condensate grid.
• Development of Shangu Offshore Gas Field and Commencement of Gas supply from
offshore field to National Gas Grid via Bakhrabad –Chittagong Pipeline.
• Construction of Elenga – Bakharabari Pipeline including suspended Pipeline along
Bangabanhu Jamuna Multipurpose Bridge. Gas Goes to Western Side of the Jamuna
River.
• Construction of Beanibazar – Kaillashtilla Gas / Condensate Pipeline and
commencement of Gas/Condenasate delivery to national grids.
• Commencements of gas supply from Salda and Meghna Gas fields.
• Discovery of large Bibiyana Gas Field. Discovery of Moulavibazar Gas field.
In gas sector Sheikh Hasina successfully resisted tremendous American and Indian pressure
for pipeline export of Gas from Bibiyana field to India. However there were few lapses and
some controversial deals. Energy Sector management failed to g deal the Magurchara blow
out in a transparent manner. Award of Gas Pipeline Construction work to Hyundai created
controversy .The pipeline design and construction was not properly monitored initially which
led to the pipe r failure while on Hydro test. However Hyundai was made to redo the work
properly without additional cost. Award of block 9 to Tullow and some other blocks lease out
to Cairn PLC and Chevron allowing them hold these for 5 initial years without any work also
created controversy.

In power sector Hasina Government scored milestone achievement. Two successful IPP
projects 450MW Capacity CCP at Meghnaghat and 360 MW Capacity CCP Horipoor are
considered trend setter in South Asia. For the first time in Bangladesh several Barge
mounted power plants were successfully installed .These are at
• 100 MW BMPP at Khulna ( Summit)
• 100 MW BMPP at Siddhirganj (NEPC)
• 100 MW BMPP at Baghabari. ( Westmont)

Not only Large IPPs and BMPPs government also managed to add some Small Power Plants
(SPPs).Summit Plants at Savar, Norshingdi and Chandina created flexibility in local power
supply situation to PBSs.

Setting up of a new generating unit at Ghorashal and some small units at Shajibazar
created comfortable surplus in power grid.Hasina government also had several power plant
projects in the pipeline at Siddhirganj, Khulna, Meghnaghat and Sirajgonj. When Awami
League handed over power in 2001 there was no concern at all in the energy sector. Power
and gas grid had enough surplus.

Many people believe very strong position of Hasina against gas export to India through
pipeline cost them the election. Alliance of BNP- Jamat won landslide victory which many
believe was very tactfully rigged. The immediate response of key persons of the
government like Mr. Saifur Rahman was in favour of pipeline gas export. Alliance
government waste first three years making several permutation an combination how to sell
their concept. But ultimately people’s power prevailed and gas export thoughts were
abandoned. Government scrapped all new power plant intiatives of Awami Government. It
even scraped a very critical project 450MW power plant initiative by Summit Group and PDB
joint venture. In 5 years alliance government could only set up only one new power plant
100MW Tongi Plant. This plant too suffered serious operational problems. The left over
works of 450MW Meghnaghat plant and Barapukuria Power plant initiated by Awami League
could be completed. The government however extended power distribution lines extensively
mainly due to provide opportunity for Khamba Group to sale electric poles at exorbitant
price. Huge demand growth and less than minimum new generation created serious deficit.
Nation suffered massive load shedding. People laid down their lives at Kansat demanding
power supply for irrigation. There were troubles at Shanir Akhra and other places. People
were deprived of power supply during Iftar and Sehri of Ramadan.

Gas sector had some successes. Rashidpoor –Ashuganj Loop line, Ashuganj-Monohordi Loop
line and Dhanua -Savar spur line by GTCL created some transmission flexibilities. But
inordinate delay of compressor station projects created transmission bottle neck. Production
from Bibiyana, Moulavibazar and Bhangura gas fields added additional Gas to grid. But
depletion of Shangu, Rashidpoor and some other minor fields and delay of pipeline
compressor station installation have create enormous crisis in the national grid. There was
no new discovery .In fact no major initiatives were taken to explore for gas. Alliance must
be credited for passing Energy Regulatory Commission Act and setting up BERC. But
selecting a politically favour incompetent person kept BERC inoperative during alliance
time.Allinace government expanded CNG utilization. But corruption in CNG 4 wheeler
import, leasing of expensive government plots to party favoured persons for setting up CNG
refuelling stations fouled up the noble initiative.

Alliance government did award the 450MW Meghnagaht 2 CCW plant to Belhasa –Orion
Group who neither had past proven track records nor financial capability to implement such
a gigantic project.CTG have not have option but to scrap it. CTG also scrapped the
Chandpoor project scheduled to be awarded to Hawa Bhaban favoured Harbin Group which
fouled up Tongi plant. Allaiance government also planned to set up contingency plants and
selected mostly their MPs and other leaders as developers.CTG scrapped this initiatives also.

Alliance Government scrapped many good initiatives for energy sector infrastructure
development but proceeded to g hand over the Petrobangla owned gas fields Feni and
Chatak including virgin Tengratilla structure to Niko.The action initially started by Awami
League. Niko achieved very little but damaged Tengratilla structure through two massive
blow outs. We may not elaborate this scandal as it is under trial at this stage. Alliance
government favoured a particular energy sector mafia in Barapukuria Coal mining project.
This case is also under trial.

The readers and people of Bangladesh can now judge which party or fronts can act
aggressively to improve the energy situation of Bangladesh analysing their past records.
Both parties had lapses .Both party encouraged corruptions. But relatively the achievement
of one party was much greater than the other achieved in two terms.

Dr. M. Tamim told about political consensus .In Bangladesh it is highly unlikely that it will
happen soon. We hope that any party winning election will do ever thing possible in fair and
transparent manner without being too fussy and without bothering for myths and hypes of
non professional theoreticians.