No operator, no fuel gains: Tk8,222cr oil jetty lies idle for long in Bay

Highlights-

• Single Point Mooring facility set up in Bay to streamline fuel import, reduce costs
• Its construction cost rises 67% from Tk4,936cr
• It was commissioned in March 2024
• The facility allows oil tankers to unload fuel at onshore facilities directly
• Delays in appointing an operator halt its launch for long
• Continued delays prevent Bangladesh from reaping economic benefits

A major energy infrastructure project expected to revolutionise Bangladesh's fuel supply system remains non-operational for more than two years after its commissioning, primarily due to delays in appointing an operator and controversies surrounding its tender process.

The Single Point Mooring (SPM) system is a floating jetty connected to a 110-kilometre network of offshore and onshore pipelines.

It enables oil tankers to directly unload liquid fuel to onshore storage facilities, reducing both time and transportation costs by eliminating the need for lighter vessels.

The SPM is located around 16 kilometres offshore from Matarbari Island in Cox's Bazar and linked through two pipelines that transport crude oil from large mother tankers to a storage terminal in Moheshkhali, and then onward to the Eastern Refinery Limited's (ERL) facility in Patenga, Chattogram.

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

Initially, authorities planned to appoint the Chinese construction contractor as the operator. However, that decision was later cancelled by the interim government, which instead opted to invite international tenders.

If the SPM were operational, Bangladesh would gain additional storage capacity of 2 lakh tonnes, sufficient to meet nearly 10 days of the country's fuel oil demand, according to the petroleum corporation officials.

The pipeline system would cut unloading time from 11 days to just 48 hours for deep-sea vessels and save around Tk800 crore annually by replacing costly lighterage operations, they said.

Authorities have floated two rounds of open international tenders but failed to select an operating firm. Meanwhile, loan repayments have already begun – adding financial pressure to an asset that is generating no return.

Despite multiple rounds of bidding, the operator has yet to be finalised.

Officials say the evaluation process has slowed due to the lack of approval from the energy ministry for appointing a consulting firm responsible for preparing the tender documents. Without this approval, a detailed assessment of bids cannot proceed efficiently.

At the same time, allegations have surfaced that the tender conditions were designed in a way that discouraged broader participation, effectively favouring the construction contractor – China Petroleum Pipeline Engineering Company Limited, which has already faced criticism for completing the project at a cost significantly higher than initially planned.

Although the tender process was described as open, limited participation has raised concerns about transparency and competitiveness.

Repeated but unsuccessful attempts to appoint the construction firm as operator have further delayed the project's launch.

Questions over tender process

According to BPC sources, the initial plan was to appoint the Chinese firm under a special provision of the Quick Enhancement of Electricity and Energy Supply Act.

However, the interim government discarded that approach and called for international tenders for operation and maintenance.

The first round of tenders, floated in November, was eventually cancelled due to procedural flaws that prevented full competition.

A revised tender was issued in December with the help of ILF Consulting Engineers. After extending the deadline twice, bids were opened on 17 February.

Although 11 companies purchased tender documents, only three submitted bids: PT PertaminaTrans Kontinental, China Petroleum Pipeline Engineering Company, and Hilong Marine Engineering (Hong Kong) Limited.

Officials noted that the consulting firm had prior working relationships with the construction contractor, raising concerns about potential conflicts of interest. The firm prepared the tender documents before receiving formal approval.

Later, the ministry asked for a reduction in the consultancy fee, delaying its official appointment. As a result, the bid evaluation process remains slow.

In an earlier tender round, more than a dozen companies showed interest, but only two submitted bids. A joint venture between China Petroleum Pipeline Engineering and buoy manufacturer Bluewater was disqualified, while Indonesia's state-owned Pertamina proposed a price higher than the allocated budget.

Several stakeholders believe that restrictive conditions in the tender discouraged well-known global SPM operators from participating.

Repeated attempts to contact senior petroleum corporation officials, including the general manager for planning and development and the project director, were unsuccessful. The corporation's chairman also did not respond to calls.

Long delays, rising costs

The project has faced delays since its inception. Approved in 2015 with an estimated cost of Tk4,936 crore and a completion deadline of December 2018, the loan agreement only became effective in 2018.

Over time, the deadline was extended four times, adding more than five years, while the project cost increased by 67% to Tk8,222 crore.

What was initially planned as a three-year project ultimately took nine years to complete.

Even after commissioning, delays continued in appointing an operator. Initially, there was a policy decision to appoint the Chinese contractor under a special legal provision.

However, after the fall of the Awami League government, the interim administration repealed the controversial law.

Later, in November 2024, a government advisory committee approved in principle the direct appointment of the same Chinese firm through a government-to-government arrangement.

However, following criticism, that decision was reversed in January 2025, and authorities returned to the open tender process.

Energy expert Professor M Tamim from Bangladesh University of Engineering and Technology stressed the urgency of making the project operational.

"It needs to be launched quickly. The country is not receiving its economic benefits. The reasons behind the cost escalation and repeated delays should be investigated, and those responsible must be held accountable," he said.