PETROBANGLA CHAIRMAN'S RESPONSE/ Hot News in Bangladesh/ Gas Compressor Station

Hot News in Bangladesh

Gas Compressor Station

PM weighs in to check Chevron deal

Asks Petrobangla to explain why open tender for GTCL project cancelled

As the prime minister sought explanation from Petrobangla chairman why he was so eager to award US company Chevron a $52.7 million contract to install a gas compressor station over the Gas Transmission Company Ltd (GTCL) system by cancelling an open tender, the chairman gave a smoky response last week.

Sources said the Prime Minister's Office (PMO) asked Petrobangla Chairman M Muktadir Ali to explain a host of issues related to the gas compressor scheme, including why the GTCL tender for compressors was cancelled and whether he had taken into cognisance 16 technical questions raised by a GTCL consultant.

While seeking the energy ministry's approval late last month for allowing installation of Chevron's compressor station over GTCL system, Muktadir concealed the fact that Chevron had not clarified the 16 technical questions.

The PMO sought the project files and explanation following a report in The Daily Star revealing this fact.

The chairman sent his response last week, apparently seeking the prime minister's permission for awarding the job to Chevron under the production sharing contract (PSC). Prime Minister Sheikh Hasina is expected to review the response today, sources said.

Petrobangla's move to award the deal to Chevron poses serious questions because the GTCL board headed by the Petrobangla chairman cancelled in May the GTCL tender to award Korean company Hyundai a contract to install three compressors under an Asian Development Bank (ADB) fund. The GTCL tender was opened in February, but the Petrobangla chairman had asked Chevron for this job in December last year.

PETROBANGLA CHAIRMAN'S RESPONSE
In his response, Petrobangla Chairman Muktadir Ali tried to justify why Chevron's compressor station should be installed in Muchai area on a priority basis instead of three at different strategic points of the country, saying installing the device would increase gas flow by 50-60 million cubic feet. This would improve gas supply pressure to Ashuganj and other areas.

He said the GTCL had floated tender for three compressor stations to improve gas supplies. But as it did not get responsive offers for all the three points and also did not have sufficient funds for the project, the authorities approached the ADB and got commitment for funding two compressors while resorting to Chevron for the compressor station at Muchai. Chevron earlier proposed to set up the station under its PSC with Petrobangla.

The Petrobangla chairman pointed out the financial and technical advantages of having Chevron's compressor over what he termed the "unresponsive" offer of Hyundai. He said Hyundai's compressor comes with a price tag of $44.47 million but Chevron's offer costs $52.7 million and its machines are bigger. Then he pointed out that the Hyundai compressor had 35,000 horsepower (HP) and Chevron's 45,000 HP.

Muktadir then defended why the GTCL board, headed by himself, had cancelled the tender in May by not taking a dozen clarifications from Hyundai as was suggested by the GTCL consultant. In a confusing statement, he said the consultant had said at the board meeting on May 9 that the clarifications were not acceptable and that in its clarifications, Hyundai had sought extra cost against some machines, which was not acceptable as per tender rules. Besides Hyundai's bid offer was 152 percent higher than the allocated budget.

On the question of ensuring transparency and competition in awarding Chevron the project, Muktadir pointed out that since Chevron's compressor had higher horsepower than that of Hyundai, its $53.7 million price tag was "justified". He added that if the government approves Chevron's offer, transparency in the project implementation can be ensured through "PSC obligations".

Then he went on to repeat article 15 of the PSC with Chevron for block 12, saying this clause allows Chevron to install a compressor as a cost recoverable investment. Under the PSC, Chevron would operate and maintain the compressor and upon cost recovery it would be handed over to Petrobangla and the GTCL would then operate it on behalf of Petrobangla.

SMOKE CLOUDS
Officials said the response from the person who himself is the source of controversy was once again misleading.

"Firstly, Chevron's proposal is unsolicited and it is being compared with the lowest bid of an open tender. This is immoral," said a competent GTCL source.

Chevron would install the compressor station on GTCL's system, not on that of Petrobangla. The GTCL is not a party to the PSC and it is not supposed to operate the compressor in its own system on behalf of Petrobangla. The PSC clause mentioned by Petrobangla is only related to Chevron's gas fields in Block 12.

He added that the letter to the PMO did not mention that Hyundai had proposed to resolve outstanding issues through negotiations and had not closed its doors when the GTCL board cancelled the bid.

"Spending $52 million for a compressor to increase gas flow of 50-60 mmcfd is not justified. Besides, an ADB consultant has determined that the compressor would actually increase gas flow by merely 9 mmcfd. The consultant recommended installing loop line in Muchai to improve gas flow pressure," he adds.

"It is ridiculous to compare two proposals based on only horsepower. Petrobangla has compared Hyundai's proposal based on some big compressor devices included in Chevron's proposal, which does not guarantee that this equipment complies with the GTCL tender requirements," he points out. "Computer analysis shows that Chevron's 45,000 HP compressor is so powerful that it would consume 5-6 mmcfd gas to run its turbine."

He said, "Transparency of this project cannot be based on horsepower. Besides, the GTCL did not ask for the higher horsepower Chevron is trying to sell. It looks like the Petrobangla chairman is trying to make the country buy whatever device Chevron has in its store to sell." He added that such imposition of a compressor on the vendor's terms is dubious. "It could be that someone has an old compressor that it was trying to get rid of," he noted.

The cost of Hyundai's compressor is actually $38.30 million, plus $6 million as VAT. This makes Chevron's proposal much costlier.

Again Chevron's proposal did not include equipment available in Hyundai's proposal. These are: certain spare parts metering facilities, off-take facility, office building, VSAT system, fire hydrant, online generator analysis etc.

"Chevron could not properly reply to the 16 questions raised by the project consultant, but the Petrobangla chairman claimed that these have been resolved," he said.

"The whole process is not transparent. PSC provisions are misinterpreted, technical committee recommendations are ignored, the consultant's queries are not met and it violates the ministry's instructions. This entire process should be investigated by an independent body," the official noted.

CHEVRON'S VERSION
Sources at Chevron said it had submitted a detailed technical proposal on the project to Petrobangla and GTCL on July 15.

They said there was no legal problem in installing the compressor on GTCL system. Under article 12.4 of the PSC for block 12, a special Joint Management Committee (JMC) comprised of Chevron and Petrobangla members could review proposals for any major development. Under this JMC, Chevron and GTCL can run the compressor station until the cost is recovered and then the compressor can be handed over to GTCL.

Chevron adds that its cost of $52.7 million includes operation and maintenance.

An official said, "Installation of compressors is not within the purview of Chevron's strategic objectives. However, given Muchai's location in Block 12, the company was willing to assist with the Muchai compressor when asked by Petrobangla last year."

Daily Hot News

Food aid for poor raised for Ramadan in Bangladesh/ News Bangla

News Bangla
One crore people to be brought under VGF programme
The government has taken an initiative for providing food assistance to around one crore poor families across the country during the month of Ramadan under the VGF (Vulnerable Group Feeding) programme.

The food ministry officials said it has already allocated around 98,436 tonnes of rice. It also asked the district administrations to collect the rice before August 25.

"We want the poor to have some comfort during the holy Ramadan month; so, we increased the number of VGF cards," Food and Disaster Management Minister Dr Abdur Razzaque told The Daily Star.

As many as 56 lakh families were under the safety programme last year. The present government has increased the number to 70.65 lakh early this year, which has further been increased to one crore ahead of Ramadan.

Two thousand poor families in each union will get 10 kilograms of rice per family.

However, in Monga-hit districts --Rangpur, Gaibandha, Lalmonirhat, Kurigram and Nilphamari -- the beneficiary families will be 2200 in number, and each family will get 20 kilograms of rice.

The people affected by Cyclone Aila in the coastal districts will be given gracious relief (GR), Abdur Razzaque said.

"The lists of VGF card holders should be prepared in such a manner that only one person of a family gets a card," said a food ministry letter to the Directorate General of Food.
The holy month of Ramadan

Act tough on extortion/ Bangladesh Prime Minister Sheikh Hasina/

Act tough on extortion
PM warns of stern action against colleagues or anyone if found involved in the crime

Prime Minister Sheikh Hasina yesterday directed the authorities concerned to take immediate stern actions to stop rampant extortions in the country.

At a regular cabinet meeting she warned that none including ministers, state ministers, lawmakers and political leaders irrespective of party affiliations will be spared if found involved in extortions.

"Stern actions will be taken against whoever is involved in extortion," Hasina was quoted to The Daily Star as saying by a minister who requested anonymity.

At the meeting chaired by herself, Hasina, also the president of ruling Awami League (AL), directed the home ministry to be tough on extortionists irrespective of party affiliations.

Referring to food and disaster management minister's recent statement that the prices of essential commodities are spiralling upward due to extortions in the transport sector, the prime minister told Shipping Minister Shahjahan Khan who is a transport labourer leader to look into the situation and to take actions accordingly.

The shipping minister told the cabinet that the police are also involved in extortion in the transport sector, according to sources present at the meeting.

Hasina wanted to know from the food minister what was the basis of his recent statement. The minister replied that his statement was based on his own study and previous experience, the sources said.

The prime minister is very unhappy with unbridled extortions, caused among others by her party leaders in the capital and other parts of the country, and she already talked to her close aides about how to tackle the problem, said highly placed sources.

She also directed the home minister to engage lawmakers of the capital in dealing with rising extortions and improving the law and order situation by forming different committees in respective constituencies.

Following the direction, Home Minister Sahara Khatun called an emergency meeting in her official residence scheduled for 7:00pm today.

Talking to The Daily Star yesterday one of the ministers said, "I told the prime minister that party leaders, who have been involved in extortions and other unlawful activities, might end up ushering in an electoral debacle for the party in the next election, if they are not dealt with an iron hand right now."

Issues including price hike of essentials, power and gas crises, pullout of troops from Chittagong Hill Tracts and the recent High Court ruling for suspending the pullout, import of egg, chicken and potato, and the swine flu situation were also discussed among other issues.

About the swine flu situation, the prime minister directed the health minister to take all out measures to contain it, and to keep public hospitals prepared. The minister said they are on high alert as the pandemic flu is spreading fast in neighbouring India.

The meeting however observed that prices of everyday essentials still remain within the tolerable level for consumers. The premier directed the commerce minister to take appropriate measures for increasing efficiency of the Trading Corporation of Bangladesh. As one of the ministers drew the attention of the prime minister to the rising prices of eggs and chickens, she directed Commerce Minister Faruk Khan to import eggs, chickens and potatoes to meet the increased demand of consumers, especially during the coming month of Ramadan.

Later the commerce minister directed his ministry officials to take measures to import eggs and potatoes immediately to rein in the spiralling prices. Talking to The Daily Star he said eggs will be imported with certificates from importing countries that they were sprayed with anti-bird flu agent.

He also said the eggs will be imported though three agencies and through a sole entry point to ensure that bird flu does not spread in the country again.

At the meeting, one of the ministers raised the issue of the ongoing gas crisis in the country, and that three fertiliser factories have remained closed due to a gas shortage. If the situation continues the factories might need to be shut completely, said a source adding that the minister stressed the need for resolving the crisis immediately.

Another minister urged the prime minister to take immediate measures to overcome the ongoing crisis of power supply.

State minister for Youth and Sports Ahad Ali Sarkar distributed sweets among his cabinet colleagues including the prime minister at the meeting, as Bangladesh cricket team won a one-day series against Zimbabwe.

Crime in Bangladesh

Foreign enemies got benefited/ Problem in Bangladesh

Foreign enemies got benefited/ Says BDR boss at first Darbar after mutiny
Julfikar Ali Manik and Kailash Sarkar

About six months after the Pilkhana massacre on February 25-26, the Bangladesh Rifles (BDR) chief yesterday for the first time hinted that the country's foreign enemies benefited from the carnage.

Without naming any such enemies, BDR Director General Maj Gen Md Mainul Islam yesterday at his Darbar said, "The people who started the mutiny have definitely done it for their benefit. BDR has not gained anything; whatever has happened has been a loss. This must have benefited someone. Our enemies have benefited."

"It has to be remembered that Bangladesh is not free from enemies in the international arena. Bangladesh's enemies definitely exist. When Bangladesh's people thought of autonomy by casting vote, Pakistan's occupying forces attacked us. Therefore, there are still many people against us," said Mainul.

Yesterday's BDR Darbar held at the Darbar Hall of the force's headquarters in Pilkhana was the first such conference after the bloody mutiny in February, which started from a Darbar at the same place.

The mutiny left 74 people, including 57 top- and mid-ranking army officers including the then DG, killed.

BDR officials said in the history of BDR this is the first time journalists were allowed inside the Darbar Hall during a BDR Darbar.

Explaining the unprecedented presence of journalists in the Darbar Hall, the BDR DG told The Daily Star, "After the mutiny people have become curious about BDR and how it functions and the media have been called in to satisfy their curiosity and to get people more involved in the functioning of BDR."

After the Darbar, the DG met journalists briefly to speak about the programme.

When journalists asked whether foreign enemies were involved in the mutiny, he said, "Under the current global geo-political situation, there exists a power of some sort against each country. I am not saying anything about foreign nationals or people of our own country [were involved in the mutiny].

"There must be someone working against the sovereignty of the country. Someone must be working against us somehow. That is why soldiers said in Darbar that BDR has not gained anything, so I said surely the enemies of the country have been benefited from the carnage. But I cannot say now the names of the enemies now, as I do not know the names. But we certainly have enemies," Gen Mainul said.

Keeping in mind the horror of the mutiny at the Darbar Hall in February, BDR authorities yesterday took huge precautionary measures to ensure security.

Sources said around 2,500 BDR soldiers attended the Darbar and the same number of people from the army, Rab and police were deployed to ensure security in every places there including the main entrances, the arsenal and the kote (ammunition depot).

Emphasising the need for ensuring fair trials for the crimes committed during the mutiny, Gen Mainul told the Darbar, "It is everyone's duty to provide facts about the mutiny if we expect justice."

He asked BDR soldiers at Darbar, "Give the right information about the mutiny with one hand and you will receive justice with the other."

Gen Mainul repeatedly said there would be very little possibility of getting justice if BDR personnel did not provide the correct information about the massacre.

Many among the soldiers who attended yesterday's Darbar were also present at the last Darbar in February.

Gen Mainul expressed his disappointment over the lies some soldiers told about the carnage.

Citing an example he said 50 soldiers claimed separately that they took shelter in a bathroom in Pilkhana during the period from February 25 afternoon to February 26 but the bathroom only has room for seven people at best.

When The Daily Star asked the DG whether they are facing any large obstacles in getting information and evidence, he said, "We have information and evidence and the CID too has got plenty of information and evidence but what we want is spontaneous flow of information."

The BDR DG also said he had observed many of the soldiers prefer to keep quiet when they go on leave or speak to people over phone following the advice of their "well-wishers".

"I would like to tell you clearly that it would be entirely impossible to ensure justice if you hide information whether it is for yourself or for others," said the DG.

He told soldiers, "Leave the friends of outside [people who do not belong to the force] and accept the friends from the inside [people in the force]."

When the soldiers told the DG that they have confidence in him, the DG said, "Take me with you if you have confidence in me, I am with you too, we must ensure justice together."

Forty minutes into his speech the DG asked journalists to leave the Darbar Hall as he wanted to speak to the soldiers in private about the flow of the information regarding the carnage.

SITUATION IN BDR
The BDR chief asked soldiers over a dozen questions. The soldiers answered all of them except the one on whether they are discharging their duties like they used to before the mutiny.

After a pause, the DG said, "I know the army, navy and policemen are now discharging their duties at different gates of the Pilkhana headquarters and the BDR arsenal and the kote. We have failed, as we could not take up this responsibility, especially in Dhaka. This is a regretful situation for any force."

Through the questions and answers between the DG and the soldiers in the Darbar Hall it was learnt that the BDR soldiers have been getting their salaries, food, rations, and doing exercises and taking part in sports but they are yet to start discharging their professional duties in Pilkhana.

Gen Mainul said the soldiers have not been doing their duties or even cleaning their arms for the last six months in Pilkhana.

"Thousands of arms have remained uncared for over the last six months. Soldiers' arms rusting before their own eyes is a dark chapter for any force," the BDR chief said, adding, "Arms are our power. The government handed those arms over to us to guard the borders."

The BDR DG said when an investigating authority seizes the arms for the soldiers' mistake and those rust and get wasted, nothing could be more tragic for a force.

SOCIAL IMPACT OF THE MUTINY
BDR DG Mainul said he observed that when BDR soldiers return to Pilkhana after enjoying their vacation, they come in without wearing their Identity Cards.

"When I enquired, the soldiers said they do not wear the IDs outside the compound as they feel ashamed of their identity after the mutiny," he said.

The mutiny stopped the marriage of a BDR subedar's daughter, said the DG citing it as an example of a negative social impact of the mutiny.

He said the groom's family thinks that if the subeder gets arrested for any reason, they would not be able to show their face in society.

ABOUT THE MUTINY
The wife of a freedom fighter who embraced martyrdom during the Liberation War wrote a letter to the BDR authorities after they had arrested her son, a BDR soldier.

The DG told the soldiers at the Darbar Hall, "She says in the letter that her husband wished his son would serve the country but the BDR authorities arrested that son. She also said that she believes a son of a freedom fighter can never do such an evil act."

"After conducting an investigation, I found that her son with arms and a grenade in hand gave a statement near a Pilkhana gate during the mutiny," the DG said, adding, "I had to write to the mother 'your son couldn't uphold the principles and values of your husband'."

He said it is evident in different reports and investigations that some BDR soldiers, especially who are young, forced many BDR subeders and other personnel to take up arms and join the mutiny.

"This is a democratic country, her independence has been gained in exchange of millions of lives and did not come out of anyone's kindness.

"The inciting remarks made against army officers, to show grounds for the mutiny, remind me the statements made during our war of independence," said Mainul, adding, "In those days Al-Badr, Razakar and Al-Shams used to circulate rumours against freedom fighters as it was circulated on February 25."

The BDR DG said most of the BDR force stay at the border operation posts (BOPs). During the mutiny they maintained their chain of command and carried out their duties preventing the inferno of Pilkhana to reach the BOPs. "For this reason BDR has been able to function the way it is functioning today and for this reason I was able to hold the Darbar today," he said.

Foreign enemies got benefited