SPM operation held back until next year

Although the construction work of Single Point Mooring (SPM) with double pipeline ended in March 2024, its operation will not begin until next year due to procrastination in the appointment of operations and maintenance (O&M) contractor.

The SPM has remained idle for nearly a year despite successful commissioning in April and formal handover in August 2024, resulting in significant financial losses for state-run Bangladesh Petroleum Corporation (BPC).

On 30 April, the BPC, the implementing agency of the SPM project, invited international tenders to appoint a contractor, but the deadline for bid submission was extended from June 19 to July 8, contributing to delay. However, only two foreign firms, one from Indonesia and the other from Netherlands, submitted tenders by the final deadline.

Officials of the BPC said that evaluation of technical offers will begin soon while the financial offer will be assessed later on. As the firms have yet to submit technical and financial offers, the operation of SPM is expected to face further delays.

The delay also stems from the government's decision not to award the contract to the China Petroleum Pipeline Engineering Company Limited (CPPEC) under a government-to-government (G2G) arrangement. Instead, the authorities opted for and open tender method (OTM) to appoint the O&M contractor.

Officials concerned said after the completion of all the necessary processes, including technical and financial evaluation, a contractor will be appointed at the end of this year, meaning the operation of the project is likely to begin next year.

Earlier, the government had decided to sign an agreement with the CPPEC for the management of SPM. On November 21, 2024, the Advisers Council Committee on Economic Affairs (ACCEA) had approved a proposal from the BPC to sign the O&M contract with the Chinese company.

Meanwhile, the BPC has constituted a separate company for the maintenance and operation of petroleum pipelines. It has already implemented four pipeline projects, including SPM with double pipeline from Moheshkhali to Eastern Refinery Limited (ERL), India-Bangladesh Friendship Pipeline, Chattogram-Dhaka Pipeline, and Pitalganj-Kurmitola Pipeline.

It may be mentioned that the SPM project was undertaken to transport imported raw petroleum to state-owned ERL in Patenga, Chattogram in order to reduce the transportation cost of petroleum fuel and ensure faster unloading from the deep sea vessels

The project was initiated in 2012 and after completing the official process, the government awarded the contract to the China Petroleum Pipeline Bureau (CPP). The BPC signed a deal with the CPP on December 7, 2016 to implement the 'SPM with Double Pipeline'.

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