The deadline of the Installation of Single Point Mooring (SPM) with the Double Line Project has been extended for the third time to June 2023, as the project cost escalates 44% of the initial estimation, according to officials.
One of this country's top priority infrastructure programmes, the SPM project is aimed at offloading imported crude oil from coastal Moheshkhali at reduced cost and time.
"The project lodged 83% progress till June," SPM Project Director (PD) Md Sharif Hasnat told The Business Standard. "Installation of more than 214 km of the 220 km pipeline has been completed. I hope the rest of the work will be completed within the extended time of June 2023."
State-owned Eastern Refinery Limited is implementing the project with the funding of Exim Bank of China. The refinery currently meets 20% of the country's fuel demand, while the remaining 80% is met through imports.
At a cost of Tk4,935 crore and the deadline of December 2018, the project was commissioned in 2015.
At present, it takes 10-11 days to release 1 lakh metric tonnes of oil from the deep sea through small lighterage. Once the pipelines are ready, it will take only 2 to 3 days to discharge the oil. Then there will be no need to operate lighterage vessels which will save transportation cost.
Then the cost was escalated by Tk490 crore and the deadline was extended to December 2019. In 2020, the cost was raised by Tk1,632 crore and the deadline extended to June 2022.
The SMP project got the third and latest cost and deadline extension in May this year. The project is now costing an additional Tk2,188 crore due to failure to complete the work within the stipulated time.
On the other hand, land owners whose plots were acquired for the work alleged they are yet to be compensated despite the multiple cost overruns.
According to economists and development experts, initiating projects without required preparation leads to time and cost overruns, as the SMP project is an epic example of project mismanagement.
Muinul Islam, economist and a retired economics teacher of Chattogram University, said, "If project implementation is delayed due to inefficiency, cost and time escalations waste government resources. It puts a lot of pressure on the country's economy."