CHATTOGRAM July 9: The final report for signing MOU (Memorandum Of Understanding) with the S Alam Group for construction of the second unit of Eastern Refinery (ERL) under the Public Private Partnership with the Conglomerate S Alam Group with an estimated cost of taka 40,000 crore has been completed by the seven-member committee constituted for this puprpose.
The seven-member committee constituted by the state-owned Bangladesh Petroleum Corporation (BPC) to review the proposal, has submitted the report to the Chairman of BPC on Tuesday which will be submitted to the Ministry of Energy and Mineral sources within the current week, said Anupam Barua, Convenor of the Committee and Director Operations of BPC.
"We have already sit in several meetings in this connection and succeded in finalising it after a thorough review, he said.
Meanwhile, the S Alam Group has submitted a MOU for signing to BPC to set up the second unit of Eastern Refinery (ERL) under the Public Private Partnership with an estimated cost of taka 40,000 crore.
With the submission of proposal from S Alam group in this regard, the BPC had constituted a seven-member committee on February 14 last headed by Md Khalid Ahmed, Director for operations of BPC. Presently Engineer Anupam Barua, Director Operations of BPC is leading the Committee.
The seven-member committee comprising of three BPC officials, three ERL officials and the managing director of Padma Oil to take a negotiable status of a proposal of S Alam Group for construction of the second unit of ERL.
Negotiations will be completed after completing the technical and financial analysis, the modality of the joint venture, the management strategy and the equity portion.
The industrial conglomerate S Alam Group sent a proposal to the Prime Ministers Office in October last year to build the second unit of ERL under a joint venture on an 80-20 equity basis on the land owned by ERL in Chattogram. S Alam group also sent a draft letter of intent to the energy ministry on January 29 last.
On the basis of S ALam group proposal, the energy division on February 5, wrote to the Bangladesh Petroleum Corporation, the parent company of ERL, informing it about the decision resulting in the formation of a seven member committee.
Earlier the BPC had prepared a Development Project proposal (DPP) for construction of the second unit of ERL that was submittted for approval by the Executive Committee of National Economic Council (ECNEC).
The total cost of the second unit of ERL has been enhanced to taka 23,736 crore from earlier at around taka 23,059 crore in the fresh DPP. As a result, the cost of the project has increased around taka 677 crore in the revised DPP framed by the BPC.
The Planning Commission had fixed the costing of taka 23,059 crore for implementation of the project. Of the total cost, the Bangladesh Petroleum Corporation (BPC) will provide 30 per cent while the rest 70 per cent will be provided by the Government of Bangladesh.
The government in 2010 had decided to set up a new plant named Installation of ERL unit-2 with an annual refining capacity of three million tonnes. At that time, the projects estimated cost was Tk 13,000 crore. The project cost has gone up at least 10 times since 2010. Now the estimated cost is around Taka 23,736 crore.
