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Bureaucracy killing a prospective project in Bangladesh

Salah Uddin Shoaib Choudhury - 6/8/2008

Following completion and handing over of Bangladesh’s first hard rock mining project at country’s Dinazpur district, vested interest groups and corrupt bureaucracy are active in sabotaging the project thus screwing up Bangladesh’s immense prospect of saving huge amount of foreign currency as well opening new vista of opportunity of import earning by exporting world-class highest grade Granite Tiles.



It is learnt from dependable sources that, Bangladesh’s annual requirement of Hard Rock is above 7.9 million tons. Even during recent times, almost the entire quantity of hard rock was coming from India, while some portion was also coming from Myanmar and Malaysia. Before initiating the Madhyapara Hard Rock Mining Project [MHMP], export price for each tons of hard rock was US$ 64. But, MHMP played important role in putting pressure on the international suppliers in reducing the price up to lowest level of US$ 22. During the construction of Jamuna Multipurpose Bridge, India and other suppliers could not increase the price, fearing Bangladesh may postpone the construction and wait for hard rocks from Madhyapara.



MPHMP was basically the brainchild of late President Ziaur Rahman, who during his visit to DPR of Korea requested the then North Korean leader to help Bangladesh in mining sector. Later, when BNP formed government in 1992 with Khaleda Zia as the Prime Minister, North Korean delegation visited Bangladesh and finalized the matter thus signing a Memorandum of Understanding. After several month efforts from both sides, contract for the project was signed thus entrusting the North Korean Nam Nam Corporation for implementation of the project. After almost 16 years of challenging work, Nam Nam Corporation completed the project and handed it over to Petro Bangla on May 25 this year. Commercial production in the project has already started. It is expected that, the project shall be able to produce 1.65 million tons of hard rock annually thus saving more than US$ 360 million of foreign exchange. Moreover, according to experts, if the production of the project could be diversified in establishing a plant to cut and produce high quality granite tiles, it would meet the local demand as well as open a new vista of opportunity for Bangladesh in getting huge income from the export trade.



Till implementation of MPHMP, Bangladesh had to mostly depend on import to meet the local requirement of hard rock, while only a small segment of the total requirement could be collected from river bed in Sunamganj district and Panchagarh district. But, in recent years, India already placed wired trap at the upper flow of water, which stops boulders and gravels from flowing down to Bangladesh territory. Such attempt by Indian authorities is taken to stop Bangladesh from getting local supply of rocks and stones, to ultimate make the country completely dependant on import.



Mining experts opine that, MPHMP could be taken as a model for Bangladesh and similar projects could be implemented within the North Bengal districts such as Rangpur, Sayedpur, Panchagarh etc. “Bangladesh needs to have at least three more project like Madhyapara in order to meet the local demand”, said the expert.



International racket of importers and exporters of hard rock became active right after implementation of the MPHMP and due to negative efforts from the racket; even some of the state owned organizations ignored purchasing stones from the local source. According to a fact sheet of November 2007, the extracted hard rock of the Madhyapara mine, developed at a cost of TK 1,025 crore, remained piled up at the mine yard every day as no relevant public organizations procured the rocks ignoring the government directives.


The total stock of the extracted rocks from the mine, which started commercial production in May, stood at around 3.2 lakh tons as the major rock-procuring organizations such as the Roads and Highways, Bangladesh Water Development Board and the Bangladesh Railway were still dependent on imported rocks, said sources in the Madhyapara Granite Mining Company and Petrobangla.



The Chief Adviser’s Office and the energy ministry directed the relevant organizations to procure the hard rock of the mine after they had come to know of the reluctance of such organizations in procuring Madhyapara rock.



But despite such directives from the Chief Advisor and Energy Ministry, no response was seen from these departments in connection with the procurement of rock from MPHMP.



North Korean state owned enterprise, NamNam developed the mine at a cost of $198 million, of which $120 million was North Korean supplier’s credit.


Although the prices of high-quality Madhyapara rocks were lower than that of imported rocks, it was unfortunate that the government organizations were not supporting a government project built with such huge funds.


Private-sector organizations do not also show much interest in buying the rocks of Madhyapara.



The price of Madhyapara boulder including VAT is $15.90 a ton whereas the price of imported boulder is around $ 21.60. The price of Madhyapara crushed-stone is $17.90 a ton and imported crushed-stone $ 27 a ton.



‘Service contractors, engaged by the public-sector organizations for their work such as the protection of embankment or construction of road, as well as private-sector organizations depend on imported rocks to siphon off money by evading taxes or by buying low-quality rocks,’ said a Petrobangla source.



Madhyapara Hard Rock Mining Project has a reserve of around 174 million tons of hard rock and around 1.65 million tons of hard rock could be produced from the mine a year.


It is learnt from various sources that a well organized gang inside Petrobangla are active in sabotaging the MPHMP by causing series of obstacle to the project and the contractor, thus making Bangladesh dependant mostly on imported stones and rock. Due to such nasty behaviors of some corrupt bureaucrats, Bangladesh’s most promising project is facing serious adversity. On the other hand, contractor of the project, Nam-Nam Corporation instead of being appreciated and rewarded for such sophisticated task, are facing day-to-day obstacles and odds in even getting the amount they already invested in the project as supplier’s credit.