Tk 8,222cr SPM project yet to go operational

A flagship energy project intended to modernise Bangladesh’s fuel supply chain has remained idle for more than two years after commissioning, held back by delays in appointing an operator and continued controversy over its tender process.

The Single Point Mooring (SPM) system — a floating jetty connected to a 110-kilometre offshore and onshore pipeline network — was designed to enable large oil tankers to unload fuel directly into onshore storage, reducing both time and costs by removing the need for lighter vessels.

Situated around 16 kilometres off Matarbari Island in Cox’s Bazar, the system is linked by pipelines to storage facilities in Moheshkhali and onwards to Eastern Refinery Limited (ERL) in Chattogram.

Built for ERL, a subsidiary of Bangladesh Petroleum Corporation, the project was commissioned in March 2024.

Authorities had initially planned to appoint the Chinese contractor as operator, but this proposal was later abandoned in favour of an international tender. Since then, several bidding rounds have failed to produce a final selection.

If operational, the SPM would add storage capacity of 200,000 tonnes — sufficient to meet roughly 10 days of national fuel demand. It would also reduce unloading time for large vessels from around 11 days to just 48 hours and save an estimated Tk800 crore annually by eliminating costly lighterage operations.

Despite these advantages, the facility remains unused while loan repayments have already begun, placing pressure on public finances without generating returns.

Energy expert Professor M Tamim of Bangladesh University of Engineering and Technology stressed the urgency of making the project operational, warning that Bangladesh is foregoing substantial economic benefits. He also called for an investigation into the causes of the delays and cost increases, as well as accountability for those responsible.

Officials say progress has been hindered by delays in appointing a consulting firm to prepare tender documents, pending approval from the energy ministry.

In the absence of this, bid evaluations have proceeded slowly.

Concerns have also been raised regarding tender conditions that may have discouraged broader participation, with some alleging that the process favoured the original contractor, China Petroleum Pipeline Engineering Company Limited, which has previously faced criticism over cost overruns.

Although 11 firms purchased tender documents in the latest round, only three submitted bids, raising questions about the level of competition and transparency.

Earlier efforts to appoint the Chinese firm directly under a special legal provision were dropped, while subsequent attempts — including a proposed government-to-government arrangement — were also abandoned following criticism.

The project itself has experienced significant delays and cost escalation. Approved in 2015 at Tk4,936 crore with a completion target of 2018, it ultimately took nine years to complete, with costs rising by 67 per cent to Tk8,222 crore after multiple deadline extensions.

Even after commissioning, uncertainty over operator selection has kept the facility idle.