Energy, transport crises block FDI-German team for prompt coalmining development

November 10, 2009

News Report

The visiting German business delegation leader Peter Clasen has identified energy crisis and transportation problem as the major impediments to attracting foreign investment in Bangladesh. Addressing a press conference at Lake Shore Hotel in the city on Wednesday, Clasen attached great importance to the energy and inland water transports sectors and indicated German investors” cooperation in this regard.

The German business leader laid emphasis on coalmining development and said the government should take immediate decision on mining method of Fulbaria coal field. Coal-fired power generation can resolve the ongoing power crisis in Bangladesh, he said. Pointing to the bureaucratic red tape, another impediment, Clasen said: “Decision makers have to change their attitude to encourage economic life instead of regulating it. Essentially this means reducing red tape and wiping out excesses of bureaucracy with the government focusing much more than hitherto on improvements of infrastructure.”

German Ambassador to Bangladesh Holger Michael, who was also present at the press conference, said the government should send unambiguous signals about Bangladesh’’s openness to foreign investment and that it maintains political framework conditions, which are conducive to long-term invest. He said functioning of Parliament is of vital importance and all political parties represented and all elected MPs should contribute to make it effective.

Asked whether the current political and economic situation is conducive to attracting foreign investment, Michael said: “Bangladesh is on a good way to a stable democracy, but we want the government put emphasis on the implementation of the ”charter for change.” The German business leader lauded the quality of Bangladesh shipbuilding industry and said: “Quality and cheap labour have attracted Europeans to buy ships from Bangladesh.”

He laid emphasis on skilled manpower development and said mere cheap labour would not be the sufficient for attracting foreign investment, “technical quality of Bangladeshi labourers should have to be improved.” He suggested developing more vocational training institutions. Clasen said German companies would invest in development of small-scale power generation plants and also in development of the renewable energy.

The German companies in collaboration with the local partners would also invest in production of different electrical appliances. Md Saiful Islam, president of Bangladesh Germany Chamber of Commerce and Industry and Chairman of Western Marine Shipyards, was also present at the press conference. The eight-member German business delegation, arriving in Dhaka on October 25, will be staying in Bangladesh till October 30.

UNB reports: The German business and investment delegation Wednesday apprised Prime Minister Sheikh Hasina of their keen interest in investing in Bangladesh in sectors like gas exploration, coalmining, and renewable energy. Meeting the Prime Minister at her office Wednesday, the delegation led by Peter Clasen, Head of Bangladesh Section of OAV, the Network of German companies doing business in the Asia-Pacific countries, said they are especially interested to expand their trade and business in Bangladesh.

The Germans prefer Dhaka and Chittagong as their chosen places of investment, Prime Minister’’s Press Secretary Abul Kalam Azad told newsmen after the meeting. The delegation also expressed their willingness to help Bangladesh in modernising its agriculture system by building modern technology-based farms and imparting training to the farmers on processing organic food items.

Regarding renewable energy, the German team said Germany as an expert country in the sector can help Bangladesh introduce solar energy and biogas system in the country on a massive scale. Prime Minister Sheikh Hasina expressed her happiness following the German delegation’’s interest in making investment in Bangladesh. She told the delegation that following the restoration of democracy in Bangladesh through the December 29 parliamentary polls in 2008, a congenial atmosphere for investment is prevailing here now.

She said Germany can import ceramics, leather products and pharmaceuticals from Bangladesh. In this context, the Prime Minister mentioned that Bangladesh has already started exporting ships to Germany, the Netherlands and Denmark, opening up a new vista for the country’’s external trade. Sheikh Hasina observed that Bangladesh could not achieve its development at required level as its democracy could not run uninterruptedly in the past.

“Now the people have their own government and the democratic government is working relentlessly to ensure economic emancipation of the people,” the Prime Minister told the Germans. Sheikh Hasina said though Bangladesh has faced electricity crisis for the last seven years, the present government within the last few months has been successful in improving the situation through proper management and hard work.

“But the climate issues have appeared as a major threat to the development process of Bangladesh,” the Prime Minister observed. Sheikh Hasina said the government has chalked out various plans, including the launch of capital and maintenance dredging in the rivers, setting up embankments and land reclamation to face the challenges stemming from the global warming.

She said though the government is taking all possible preparations to protect its people from the natural calamities, it is not possible to face the climate-change challenges alone. Hasina also reaffirmed her promise to turn Bangladesh into a food-sufficient country again the way the previous Awami League government did it. The German delegation lauded Sheikh Hasina’’s leadership in the international forums and hoped that she would be able to free the people of Bangladesh from poverty and all other socioeconomic problems.

Hasina thanked Germany for its continuous support and assistance to Bangladesh since its independence in 1971 under the leadership of Bangabandhu Sheikh Mujibur Rahman. Principal Secretary to the Prime Minister MA Karim, Prime Minister’’s Office Secretary Mollah Waheeduzzaman, Ambassador Ziauddin and German Ambassador in Dhaka Holger Michael were present.

Source: http://www.newstoday-bd.com/frontpage.asp?newsdate=10/29/2009#22456

Date: 29  October 2009,  Bangladesh


German investors talk energy with Hasina

November 10, 2009

Unb, Dhaka

A high-profile German business and investment delegation yesterday apprised Prime Minister Sheikh Hasina of their keen interest to invest in sectors such as gas exploration, coalmining and renewable energy. Meeting with Hasina at her office, the eight-member delegation led by Peter Clasen, head of Bangladesh section of OAV, a network of German companies doing business in the Asia-Pacific countries, said they are interested in expanding trade and business in Bangladesh.

 

The Germans prefer Dhaka and Chittagong as their chosen places of investment, Prime Minister’s Press Secretary Abul Kalam Azad told reporters after the meeting. The delegation also expressed their willingness to help Bangladesh in modernising its agriculture system by building modern technology-based farms and imparting training to the farmers on processing organic food items.

On renewable energy, the team said Germany as an expert country in this sector can help Bangladesh introduce solar energy and biogas systems on a massive scale. Hasina expressed her happiness following the delegation’s interest in making investment in Bangladesh. She said Germany can import ceramics, leather products and pharmaceuticals from Bangladesh.

In this context, the prime minister mentioned that Bangladesh has already started exporting ships to Germany, the Netherlands and Denmark-opening up a new vista for external trade. Hasina observed that Bangladesh could not achieve its development at required level as its democracy could not run uninterruptedly in the past.

Date: 29  October 2009,  Bangladesh

Vast energy sources remain untapped, says FICCI-Power crisis blamed on indecision

November 10, 2009

FE Report

news_image_2009-10-19_7551Foreign investors continue to grumble over the country’s perennial energy crisis and demand uninterrupted electricity and gas supply to boost industrial growth. They said the country has significant energy sources, most of which remained unexplored due to indecision leading to the acute energy crisis.

“The country is not poor but poorly managed,” said the President of Foreign Investors’ Chamber of Commerce & Industry (FICCI) Waliur Rahman Bhuiyan at the chamber’s luncheon meeting at a city hotel Sunday. State Minister for Energy and Power Muhammad Enamul Huq was guest of honour at the function, which was also addressed by FICCI Vice President Steven N Wilson.

Pointing to the country’s energy supply crunch and its impact on the economy the FICCI president said the country’s industrial units especially the export oriented ones were bearing the burnt of the crisis as production had being badly hurt. “Some entrepreneurs have set up captive power units to have energy supply of their own,” the FICCI president said and added, “Those plants are also not working properly due to low gas pressure.”

“We have been demanding constant and sufficient energy supply over the past several years but to no effect,” Mr Bhuiyan added. The state minister assured the overseas investors of mitigating their energy problem with the implementation of, what he said, the government undertaken short, medium and long-term measures along with fast-track projects. “Improving power and energy sector is one of the major government pledges which will be executed in the current tenure,” said Mr Huq.

The government has already taken initiative to develop the energy sector, he assured. Some 752 megawatts (MW) of additional electricity supply would be added to the national grid by December 2009, some 1360 MW by 2012 and 1445 MW more by 2013-2014. He said the government has introduced daylight saving time, began distribution of compact fluorescent light (CFL) bulbs free of cost to ensure efficient energy use.

The government is also working seriously for setting up of nuclear and coal-based thermal power plants and augmenting renewable energy use to diversify the fuel sources for energy, the state minister said. The country is now reeling from an acute energy crisis with the power supply hovering around 3,700 MW against the peak hour demand for 5,500 MW, while the natural gas supply is around 1980 million cubic feet (mmcf) daily against the daily demand for over 2200mmcf.

“Bangladesh’s energy sector still remains unexplored to a great extent,” said the FICCI vice president. The country has been under a moratorium on exploration of energy sources, said Mr Wilson, who is also the President of Chevron Bangladesh.

Source:http://www.thefinancialexpressbd.com/2009/10/19/81947.html

Date: 19 October 2009, Bangladesh


Minister signals green after visiting German open-pit coal mining

November 10, 2009

Special Correspondent

The government on Monday requested Germany to assist Bangladesh to extract coal by the open-pit mining method. The commerce minister, Faruk Khan, called upon the German ambassador, Holger Michael, to provide some expert advice as the government is still in doubt about the possible impact of open-pit mining on the environment.

Holger met Faruk at his secretariat office and discussed investment in the renewable energy sector and dredging to deepen the rivers and increase their navigability. ‘We are examining the pros and cons of open-pit mining in the country which is densely populated and suffers from scarcity of land,’ Faruk Khan reportedly told Holger. Holger said that the German government would provide all technological and investment support to Bangladesh through the GTZ, the German technical agency.

From the very beginning of Awamileague government, a move regarding this, has been underway to use the open-pit mining system in the country, and the UK-based company, Asia Energy, has demanded to get permission to use the open-pit mining system at Phulbari coal field in Dinajpur.

State minister for environment Hasan Mahmud visited Germany on September 6-9, reportedly to acquire some knowledge of open-pit mining and coal-based power plants. An official of the environment ministry, who had accompanied the minister, told reporters on Monday that the minister’s visit was arranged by the GTZ and they had visited many coal-mines and power plants including that of German company RWE.

The official said that after Hasan Mahmud’s visit, he submitted a report to the government saying that they had seen nothing wrong in open-pit mining in Germany and that it was successfully generating electricity from coal. ‘We have collected still pictures, videos and other materials in favour of open-pit mining. We have seen that Germany was doing a tremendous job in operating open-pit mines. The RWE is producing around 7,000MW of electricity from the coal from two mines. We have seen nothing wrong with open-pit mining, but some people in Bangladesh are against the system as they do not want the development of the country,’ said official of the environment ministry.

The energy ministry last month recommended that Prime Minister Sheikh Hasina allow open-pit mining at Barapukuria coal-field, and she told the ministry to carry out a detailed study and present the findings to her after which she will decide what to do.

Source: http://weeklyeconomictimes.com/news-details.php?recordID=4492

Date: 18 October 2009, Bangladesh


Coal less costly power source, says Mohammad Enamul Haque

November 10, 2009

R.Akter

The State Minister for Power and Energy Mohammad Enamul Haque said recently in generation of electricity from diesel and furnace oil is very costly. He termed coal as the only option for generating electricity at low costs and emphasised the need for its immediate extraction. Power generation has reached a point where the economy is seriously hampered for shortage of electricity by about 1,500 megawatts.

He said, production falters in many industries where gas is either a fuel or a raw material or both. Gas supply to some sectors has to be suspended to meet demands of others. The crisis is such that some big investment proposals for gas-based industries have been deferred for at least three years. This happens due to short supply of natural gas that fuels about 80 percent of power generation. The existing recoverable gas reserve is estimated to last a few years.

Against this backdrop, coal can be the best option for power generation. Solar, wind and nuclear energies are the other options but those would take longer time to harness in bulk. The country has a proven reserve of 2,086 million tonnes of quality coal, which is equivalent to about 19 TCF of natural gas. According to experts, this coal is enough to generate 5,000mw of electricity for up to 90 years. The local coal is safer as it contains less sulphur and carbon than the imported coal. It will also save about US$500 million that Bangladesh spends annually to import this fossil fuel. Bangladesh should therefore go for quickest possible extraction of the coal resource in a cost effective and environment-friendly way. Coal is still the source of world’s 30 percent energy. But a day may come soon when use of coal might be discouraged as part of global action to reduce greenhouse gas emission.

Surce: http://weeklyeconomictimes.com/news-details.php?recordID=4493

Date: 18 October 2009, Bangladesh


Now coal is the answer

November 10, 2009

Editor

The State Minister for Power and Energy has said generation of electricity from diesel and furnace oil is very costly. He termed coal the only option for generating electricity at low costs and emphasised the need for its immediate extraction. Power generation has reached a point where the economy is seriously hampered for shortage of electricity by about 1,500 megawatts. Actually, production falters in many industries where gas is either a fuel or a raw material or both. Gas supply to some sectors has to be suspended to meet demands of others. The crisis is such that some big investment proposals for gas-based industries have been deferred for at least three years. This happens due to short supply of natural gas that fuels about 80 percent of power generation. The existing recoverable gas reserve is estimated to last a few years.

Against this backdrop, coal can be the best option for power generation. Solar, wind and nuclear energies are the other options but those would take longer time to harness in bulk. The country has a proven reserve of 2,086 million tonnes of quality coal, which is equivalent to about 19tcf of natural gas. According to experts, the coal is enough to generate 5,000mw of electricity for up to 90 years. The local coal is safer as it contains less sulphur and carbon than the imported coal. It will also save about US$500 million that Bangladesh spends annually to import this fossil fuel. Bangladesh should therefore go for quickest possible extraction of the coal resource in a cost effective and environment-friendly way.

Source: http://weeklyeconomictimes.com/news-details.php?recordID=4523

Date: 18 October 2009, Bangladesh


OGPC’s Road March: What For?

October 4, 2009

Engr Khondkar A Saleque

The “National Committee to Protect Oil, Gas & Port” (OGPC) held a road march from Dhaka to Cox’s Bazar in protest against what it said the present democratic government’s bid for leasing out some offshore exploration blocks in the Bay of Bengal for petroleum exploration. The government has overwhelming peoples’ mandate to rule the country for five years. Obviously they are mandated to take decision for exploration and exploitation of natural resources for fuelling national economy. There are government organizations responsible for carrying out assigned tasks and there are well-documented approval procedures to handle such issues. The parliament is very much active to talk issues of national interest and elected representatives can any time raise questions concerning national interest.

The nation is now suffering from serious energy crisis, fuel supply crisis. At this moment all patriotic citizens must support government efforts to explore national resources and create power generation facilities without creating any unnecessary barriers. Bangladesh has unexplored gas and oil in the offshore. It has substantial volume of high quality coal at shallow depths in around 100 sqkm in onshore area. But, energy security of 150 million people is at stake.

When the nation needs to explore natural resources for future energy security the OGPC wants ban on open pit mining for coal. They want all moves to lease some offshore blocks to selected IOCs in the Bay of Bengal.  At a time when nation needs quick access to own resources the self-destructive actions of a certain identified group of vested interest must not be taken lightly. Conspicuously this group remain silent when legal and illegal means are taken to import dump ash coal in Bangladesh from a neighbouring country or when India and Myanmar encroach our maritime boundary. They even do not bother about subsidence impact of Barapukuria mining. They do not talk about wastage of 34000 crore taka in uneconomic venture of underground coal mining at Barapukuria.

Some so-called left leaning political leaders and some columnists have also joined the chorus. These politicians should try to win election and speak in the elected Parliament. In the backdrop of above let us discuss the situation in some depths.

Bangladesh proven gas reserve is running out although there should not be any genuine concern that our entire gas resource is going to be exhausted. Bangladesh is still the least explored country. Vast onshore area and almost the entire offshore remain unexplored. So far there has been no serious attempt to explore for petroleum in the deepwater. Most of our major gas fields like Titas, Habiganj, Bakhrabad, Kaillastilla, Rashidpur, Feni, Chattak and Haripur were discovered by international oil companies. Our own OGDC (now Petrobangla) and Bapex discovered some small gas fields. Then again IOCs discovered Sangu, Bibiyana, Jalalabad, Moulavibazar and Bhangura gas fields. Our own capacity was never grown to any stage that we could invest and explore for oil & gas applying modern technology. But at the same time there is no denial that no genuine efforts were made to professionally make our own companies competent.

Government of Bangladesh is not in a position to make significant investment in exploration and exploitation of natural resources. So it mostly relied on lending of development partners to develop discovered resources and IOCs to explore petroleum resources. Continued negligence to BAPEX has reduced the company now to a weak and sick company not capable to accomplish assigned tasks with required urgency. It can not carry out offshore exploration. We have no option but to engage IOCs for it at this stage.

We should have started offshore exploration at least from 1990s. But even two democratic governments since 1991 till 2001 did not take necessary initiatives. India and Myanmar carried out extensive explorations and discovered some major resources. Bangladesh started its efforts in late 2005. The draft PSC was updated professionally. Offshore exploration is a pure gamble. So any PSC document must have required incentives to attract IOCs. Updated PSC draft is still available in the websites. PSC document is not a document on which a Tom, Dick or Harry can make comment professionally. An elected government does not require to seek people’s opinion every now and then on all issues. In addition the political government has its responsibilities to implement its election pledges.

But, certain quarters are misleading people. It has been ensured that an IOC will be able to export 80 percent of its portion’s gas (not from the share held by Petrobangla) in LNG form only if Petrobangla refuses (which is highly unlikely) to buy it.

But, the OGPC is telling people that the IOCs will own 80% of the gas of offshore discovery. It is a deliberate misinterpretation of PSC provision; it is a propaganda to drum up peoples support. IOCs will offer production sharing split from 50%-80% to PB. IOCS will also offer its share of gas to PB. It is only if PB refuses to buy gas then  IOCs may export 80% of their share of gas in the form of LNG. In the present situation such situation will not arise as PB desperately needs gas.

It is a crime to misguide people. The road march of OGPC was not to serve people or country’s interest but to serve interest of neighbouring countries, which want to create barriers for our offshore exploration.

OGPC also opposes exploration of our own high quality less polluting coal in the most technically appropriate manner to extract maximum resources. They challenged Engr Mahmudur Rahman in 2005-06, they challenged Dr M Tamim in 2007-08 and now they are challenging Sheikh Hasina government. Who are they? Some paper tigers, some failed politicians, some parasites. Other than making sarcastic statements every now and then did they make any substantial contribution ever in the development of energy sector?

Bangladesh has five discovered coal-fields in greater Dinajpur and Rangpur districts. The mines actually cover about 100 sqkm. About 3 billion tonnes explorable coal are there which if properly mined can generate about 20,000 MW power for 25 years. For the energy security of 150 million Bangladeshis it is a massive resource. Modern mining methods adopted in many countries can perfectly address all myths and propagandas, can manage professionally all impacts.

Bangladesh imports polluting inferior quality coal from neighbouring country. This coal is seldom used even in that country. They dump it to Bangladesh, which pollutes our environment. Coal merchants and the beneficiaries make huge profit. Our self styled patriots of OGPC do not speak against them. If BAPA is so much concerned about environment then why they do not protest against import of dirty coal?

Source:http://www.ep-bd.com/news.php?cat_id=31&archive=36&namee=COMMENT

Date: 01 August 2009, Bangladesh