Multinational cement manufacturing company LafargeHolcim Bangladesh Ltd will have to pay around Tk 902.50 million to state run Jalalabad Gas Transmission and Distribution Systems Ltd (JGTDSL) on account of pending gas bills.
LafargeHolcim will have to pay Tk 100 million along with regular bills within one month and the remaining amount will have to be paid in quarterly installments each having the quantity of Tk 100 million.
The country’s leading cement manufacturing company will pay the pending gas bills in line with the verdict of the Appellate Division of the Supreme Court, according to the company statement as disseminated through Dhaka Stock Exchange on Monday.
LafargeHolcim will have to pay gas bills as per the tariff set by Bangladesh Energy Regulatory Commission (BERC) and the JGTDSL will maintain supplying gas to the company as per the terms of Gas Sales Agreement (GSA).
“It’s a great win for us as we were fighting to collect the pending gas bills as set by the BERC from the company for years,” JGTDSL Managing Director Md Harunur Rashid Mollah told the FE Monday.
The dispute between the parties under the GSA will be determined by the Arbitration Tribunal, and the Hon’ble Court’s order will not have any impact on the merits of the dispute that will be adjudicated by the Arbitration Tribunal. If the Arbitration Tribunal passes an Award in favour of the Company, the Company will be entitled to recover or adjust, in terms of the Award, the disputed amount paid to JGTDS by the Company in compliance with the above stated order of the Appellate Division.
Sources said, the cement company has been consuming around 16 million cubic feet per day (mmcfd) of gas in total of which it consumes 12.30 mmcfd to run boiler for cement production and remaining 3.70 mmcfd to run a captive power plant at the factory site.
LafargeHolcim was earlier paying gas tariff in line with the GSA signed between the JGTDSL and the then Lafarge Surma Cement Limited 15 years ago in January 2003.
It was paying Tk 7.91 per cubic metre as gas tariff against its gas consumption from the JGTDSL, which was the ceiling price at US$2.8 per Mcf (1,000 cubic feet) as set in the GSA between the two companies.
As per the court verdict, the cement factory will have to pay almost double tariff at Tk 13.85 per cubic metre to run its captive power plant and Tk 10.70 per cubic metre for gas consumption in cement factory.
LafargeHolcim Bangladesh Ltd, previously known as Lafarge Surma Cement Limited, is a joint venture of LafargeHolcim, a world leader in building materials and Cementos Molins group of Spain.
It was incorporated on November 11, 1997 as a private limited company in Bangladesh under the Companies Act 1994.
Subsequently, on January 20, 2003, it was made into a public limited company.
The company is listed in both Dhaka and Chittagong stock exchanges.
Stock price of LafargeHolcim fell by 4.82 per cent to close at Tk 59.30 per share in Dhaka Stock Exchange following the news of the court verdict Monday.
It has paid up capital worth Tk 11.6137 billion.