The Planning Commission has cancelled a ‘non-feasible’ development project of the Bangladesh Sugar and Food Industries Corporation (BSFIC), seven years after its approval.
The commission has found the increase in project costs ‘abnormal’ and not drafted following any feasibility study.
In 2014, BSFIC took up a development project for a project titled ‘Production of Electricity by Co-Generation and Establishment of Sugar Refinery at North Bengal Sugar Mills’ in Natore.
To get quick approval from the Executive Committee of National Economic Council (ECNEC), BSFIC undercut the project cost at Tk 730 million. There was a decision to purchase Indian and Chinese machineries to lower project costs. The project was scheduled to be completed by 2016.
However, after ECNEC’s approval, BSFIC decided to import machineries from the European market, instead of India and China.
Later, BSFIC got ECNEC approval for revised the project cost at Tk 3.24 billion and an extension for two more years.
But, BSFIC failed to get any low bidders even after two calls for international tender. In both cases, the lowest tenders were above Tk 10 billion, four times higher than the revised project cost.
In January, BSFIC again prepared a revised DPP of Tk 9.27 billion, 185 percent higher than Tk 3.24 billion, and sought approval from the planning commission.
Seeing the abnormality in cost estimation, the commission has cancelled the project.
Planning commission member Nasima Begum said that there is no scope of approval if the project cost is inflated so abnormally.
The North Bengal Sugar Mills produces one kilogram of sugar at a cost of Tk 132 and sells it at Tk 56
Citing that the project has seen nominal progress so far, she said, “The finance ministry and the Implementation Monitoring and Evaluation Division (IMED) also are not in favour of approval. The project has been cancelled unanimously. BSFIC is requested to prepare a fresh DPP after a feasibility study.”
According to the industries ministry, North Bengal Sugar Mills was established at Lalpur, Natore in 1933. Initially, the mill could thresh 1,220 tonnes of sugarcane a day. Additional installation of machines during 1978-1991 helped increase the capacity to 1,500 tonnes.
Most of the machineries are now in a state of disrepair. The threshing capacity of the machines has also decreased.
Industries ministry officials said that the state-run the North Bengal Sugar Mills is a loss-making establishment. In the 2019-20 fiscal, it incurred losses of Tk 950 million.
The North Bengal Sugar Mills produces one kilogram of sugar at a cost of Tk 132 and sells it at Tk 56.
With the approved Tk 3.24 billion budget, BSFCI has already spent Tk 100 million. A jeep, five tank lorries and a double cabin pickup were purchased with the money.
Prothom Alo investigation found that the jeep is being used at BSFIC headquarters while the rest are deployed in North Bengal Sugar Mills.
The planning commission raised the question about the purchase of vehicles amid nominal progress of the project.
When asked, Kabir Ahmed, the project director, replied that he has recently been deployed to the post.
“The project was initiated to make the mill profitable. However, estimation of the project costs was not appropriate. We will draft a fresh one as per feasibility study,” he said.
*This report appeared in Prothom Alo print and online edition, and has been rewritten in English by Sadiqur Rahman