Report
Kaptai Hydropower Extension by 100MW Awaits ECNEC Nod
The government has reinitiated construction of the 6th and 7th units at Kaptai hydropower plant after a social impact survey found there is no environmental, ecological and social barriers for the fresh units. After two-year of stoppage in the process, now the government is completing formalities one after another. The project at present awaits ECNEC approval. However, the government expects funding from Japan government. Already the feasibility study has been completed in financial cooperation from JBIC. But after the feasibility study, an apprehension was raised by some quarters that fresh land would be submerged and many people would become landless if the two units were set up. Following the apprehension, the government initiated the social impact assessment.
The capacity of Kaptai hydro station is now 230-megawatt. Five units are in operation in this lone hydropower plant in the country. Of the units, two are 40-MW each and three 50-MW each. Each of the new units will be 50-MW capacity. As a result, the capacity of the entire plant will be 330-MW and annual average generation capacity will stand at 979 gigawatt/hour. The cost for the new units have been estimated at Tk 5,964 million. Of the required investment, Tk 3,593 million will be required in foreign exchange.
According to officials at Power Division, the project has been given pre-ECNEC approval. Once the approval is given, the government will intensify the funding mobilization process. The government expects that JBIC will fund the project. Power Development Board (PDB) officials said if everything goes well and loan can been mobilized, the units will be able to go into operation by 2009.
According to the PDB, M/S Tepsco of Japan started feasibility study for the 6th and 7th units of Kaptai in 1998. The consultant organization submitted its report in 2000. The study said another 100-MW can be generated from the existing capacity of Kaptai dam.
The PCP of the PDB highlighted the following points:
- Improvement of intake channel
- Construction of an intake, two penstock tunnels, a powerhouse and tailrace.
- Installation of two units of hydro-mechanical and generating units of 50-MW capacity each.
- Extension of the switch yard.
- Other optional works.
It was gathered that the previous government had initiated the project, but later it was decided that it would not be implemented before the social impact assessment. The study imposed some conditions for implementing the project:
“The project authority should in a regular manner keep stakeholders brief about the reservoir operational features. These may be done by means of issuing bulletins by arranging miking etc. This should particularly be done during cultivation season starting from February to August each year, ” suggested the study.
“Field survey during SIA study revealed that there is practically no water level gauge in the reservoir area, by which the stakeholders will know the water level on particular day and organize their individual efforts for cultivation. The project authority should immediately take a plan for installing water level gauges in each upazila and important marketing centers,” it added.
The study further said the government should embark upon implementing specific development scheme for the hill tracts surrounding the Kaptai reservoir. Such development scheme should encompass the following activities:
- Development of roads and communication.
- Extension of electricity distribution network to each upazila and important market place.
- Undertake poverty alleviation program.
- Implement enhancement of education by building educational infrastructures.
- Undertake program for development of small-scale industry, cottage industry, fish processing, food processing etc. for employment generation.
- Development tourism for employment generation.”
PM Approves Shell's Transfer
EP Report
Prime Minister Khaleda Zia has approved the transfer of Shell's entire operations and upstream assets in Bangladesh to its existing partner in the country, Cairn. Anglo-Dutch Shell's upstream interests in Bangladesh comprise a 37.5 percent operated interest in the block 16 Sangu gas field and a 45 percent operated interest in exploration blocks 5 and 10.
The Shell and Cairn in a joint press conference in Dhaka recently announced the approval from the PM. Now the final makeover of Shell interests in Bangladesh to the latter is taking place and will be complete shortly. Financial reckoning of the US$ 50 million acquisition deal, however, dates back to July 1, 2003.
Shell's most local employees will be absorbed by Cairn. They will also be given financial compensation.
Earlier on August 4, 2003, the Scottish Cairn announced that it had entered into a legally non-binding Letter of Intent with Shell to acquire all of its upstream assets and undertakings in Bangladesh's gas industry.
The cash considerations was to be adjusted to reflect net working capital movements between the economic effective date and the closing date, including any accrued royalty payments, and carry reimbursements.
Following the approval from the top office, now Cairn's operated interests in Sangu development area will be 75 percent -- the remaining 25 percent held by Halliburton of the United States.
Also, following the acquisition, the Scottish company will have 90 percent operated interests in blocks 5 and 10 while the remaining 10 percent is held by state-run Bapex.
In announcing the PM's approval energy giant Shell made it clear that their exit from Bangladesh is neither linked to Bangladesh's position against gas export nor lacking in investment environment.
“Shell's decision to divest its Bangladesh assets fits within the overall strategic development of the group's global portfolio,” said Shell Bangladesh Managing Director, Zaffar Chida.
“Shell is confident that Cairn will continue to run the business to proper environmental, social and operational standards, in the best interest of Bangladesh and its people," he said.
Cairn Energy Bangladesh's General Manager Ian Halstead reassured that no seismic survey would be carried out in the Sundarban area, in order to maintain the ecology of the world's largest mangrove forest.
Replying a query on pipeline gas export to India, he also reaffirmed Cairn's position that it has been here for the domestic market and will be happy to meet the domestic demand.
With Sangu being their only gas-producing field in Bangladesh, Shell's Zaffar Chida admitted a technical trouble in one of the wells there and assured that Cairn would address the problem properly.
Although Shell was the operator, Sangu in block 16 was discovered by Cairn in 1996. Remaining gross proven-plus-probable reserves in the field is 1,100 BCF (billion cubic feet).
Armed Forces Deployed at Key Oil-Gas Installations
EP Report
The government has deployed armed forces at four strategic key point installations (KPIs) of country's oil and gas sector. The points are the Eastern oil refinery at Patenga, Daulatpur oil depot in Khulna, Ashuganj gas-metering station and Demra city-gate gas station in the capital.
“One to two platoons of armed forces personnel were deployed in each of the installations,” said Lieutenant Colonel M Nazrul Islam, Director at Inter Service Public Relations (ISPR) Directorate.
Members of Bangladesh Navy were deployed at the Eastern oil refinery and Bangladesh Army personnel at Daulatpur, Ashuganj and Demra.
Nazrul said that the the deployment took place following a request from the Ministry of Energy and Mineral Resources.
The government, however, termed the deployment a routine arrangement, not linked with the April 30 deadline given by the main opposition Bangladesh Awami League.
Officials said the main responsibility of the armed forces would be ensuring overall security in coordination with the respective installation.
Before the deployment, sources said, the government security agencies had taken stock of the existing safety arrangements of the strategic points from the authorities concerned, apart from intelligence gatherings.
They said concerned ministers of the strategic government establishments drafted the existing security arrangements and dispatched the “sensitive” files along with requirements.
The security and intelligence agencies have also drawn up strengthened protection parameter for the KPIs across the country to forestall any subversive acts, according to sources.
In drawing up beefed-up protection plans, the security agencies evaluated the reports from the concerned ministries and authorities as well as the intelligence agencies, the sources said.
With the security being scaled up after wholesale changes in police force in the Secretariat, a government policymaker said everything is going on under routine work.
Preferring anonymity, he also denied any extra-cautionary measures in view of the opposition Awami League-set deadline for the government to go as well as planned hartal.
But, sources said that the intelligence agencies found a number of government establishments, strategic points and KPIs as vulnerable in the event of any subversive act.
Among the KPIs getting military protection, Ashuganj metering station is the main transmission hub wherein gas comes from the hydrocarbon fields in Beanibazar, Kailashtila, Jalalabad, Rashidpur, Habiganj and Titas location 5.
On the other hand, gas from the stations is transmitted into Dhaka and Chittagong through Bakhrabad, across river Jamuna through Elenga and Zia Fertilizer Factory at Ashuganj.
The city gate of Titas at Demra is the most important point for capital Dhaka as it receives natural gas through the station, said officials at the Energy Ministry.
Tax Holiday for Private Power Producers
In a move to encourage power generation in private sector, the government may offer 10-15 years tax holiday to the entrepreneurs and provide duty free fuel for generating power in remote areas having no access to electricity. The special incentives have been proposed in a draft guideline on private investment in the development, operation and maintenance of physical infrastructures in the country.
Officials said prepared by a seven-member committee headed by Kamaluddin Siddiqui, Principal Secretary to the Prime Minister, the draft has already been sent to the Cabinet Committee on Economic Affairs for its approval.
According to the draft, a Private Infrastructure Committee (Picom) will be formed for coordinating and supervising infrastructure development projects under private sector and taking quick decisions regarding their implementation. The Board of Investment (BoI) will act as the secretariat of the Picom, proposed to be headed by the Prime Minister's Principal Secretary.
The draft has identified telecommunication, electricity, gas, roads and railways, airports, tourism, water supply, industrial park, land reclamation, river dredging, health and education facilities, rural infrastructures, and sea, river and land port development as prospective sectors for private investment.
ERC Appointment: Report Sent to PM
The Energy Ministry has sent the report of the selection committee on appointment of the Chairman and Members of the Energy Regulatory Commission (ERC) to Prime Minister Khaleda Zia for her consideration.
However, sources concerned said that the appointment of the Chairman is likely to be delayed as the selection committee in making recommendation for the post did not follow the criterion properly.
As a result, there are hints that appointment to two Member posts will be made shortly and fresh applications will be sought for the Chairman of the ERC.
The selection committee headed by former caretaker government Advisor Hafizuddin Ahmed on March 29 submitted its recommendation to the Energy Ministry. “I'm very happy that none from the top tried to influence,” he had said while handing over the summary recommendation of the selection committee to State Minister for Energy AKM Mosharraf Hossain MP.
The ERC Act was passed in Parliament a year back. Since then, the Energy Ministry has been making its bid for the appointments for starting function of the commission. There is also pressure from the World Bank for early commissioning of the commission, a major measure for reform in the sector.
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