The recent controversy on Chevron deal and the follow up political rumblings surrounding the PM’s son and her energy advisor on one side and Amar Desh editor on the other side has captivated nation’s attention for the last few weeks. While we debate how freedom of speech is being used to trash political opponents, or how political thuggery is trying to gag free speech, the very important issue of a specific corruption allegation is getting crowded out.
Let’s keep Mr Sajib Wajed or Mr Mahmudur Rahman out of the issue. Mahmudur rahman is making full use of the victimhood, and his showmanship on this issue is ugly. And Mr Wajed is also dragged in this issue unnecessarily or prematurely. It is an unfortunate fact of life for the children of politicians of Bangladesh and beyond that they are always under close scrutiny and often victim of rampant character assassination attempts.
However, leaving these individuals aside, we are still left with a specific corruption allegation that has merit enough to demand further discussion and scrutiny. Amar Desh reports a specific corruption report with copies of leaked official correspondence.
The specifics of the corruption allegation are self revealing. A $52 million job was allocated to Chevron without required transparency that includes a tender process. And while protesting the report, PM’s energy advisor repeatedly misrepresented facts. While he said there was no bid in three tenders, the fact is that the Government cancelled earlier lowest bid from Korean Company Hyundai only to award the job to Chevron. He also lied about his agenda for the US trip.
Instead of relying on Amar Desh, let’s turn to the premiere newspaper of Bangladesh, the Daily Star. The Daily Star printed at least seven reports on this specific issue. (Interestingly, while Amar Desh report is based on government documents, the Daily Star series report, as usual, is based on unnamed sources. But let’s leave this aside, as no one would accuse the Daily Star of partisan hatred of the current government, or Mr Mahfuz Anam, its editor, of ugly showmanship.
On April 11 2009, the Daily Star warned that a compressor station for gas distribution pipeline was being planned to be awarded to Chevron which would “… unduly give Chevron the authority to control major chunk of the country’s gas distribution system. This will definitely create a number of serious legal complications over the authority and ownership of the compressor station and the distribution pipeline” .
Another follow up report published on June 21 2009 quotes a gas transmission expert: “Even if we accept the idea of pumping PSC investment in compressor, I say Muchai gets no priority for a compressor station now. Because of high volume of gas produced by Chevron, the gas pressure at Muchai and onwards is 1024 pressure per inch (PSI). This pressure will stay for a couple of years at this point. But we need a compressor at Ashuganj where the pressure drops to 700-800psi. A number of new plants are being set up close to the Ashuganj pipeline system. Then why prioritise Muchai now?”
The same report also quotes another official: “Petrobangla’s extreme reliance on foreign investment in the gas sector has already created a precarious situation for the national exchequer. The cost of gas is now very high because foreign companies are producing more gas than the national companies which have been denied adequate funds for their healthy growth”.
On August 02 2009, based on undisclosed sources, a piece reports that: ” …Petrobangla continues to hammer hurriedly awarding US oil company Chevron the contract for an over-priced gas compressor station project in the Gas Transmission Company Ltd (GTCL) system through a questionable process by totally sidelining a host of technical and financial questions raised by a GTCL consultant.”
The report also quotes a GTCL consultant: “Chevron has not yet submitted its detailed technical and price proposals for Muchai station. An energy ministry approval would actually give Chevron a go-ahead without scrutinising what the GTCL is buying.”
According to Daily Star’s sources the report raised the following important points,
- The cost-recoverable Chevron’s Muchai station’s actual cost would be much higher than $ 52.7 m because this cost does not include two years’ operation and maintenance cost or that of spare parts.
- The sources also raised questions whether Petrobangla could bypass the cabinet’s approval for imposing a cost of $ 52.7 m for a GTCL project outside a PSC area just by making an interpretation of a PSC clause in favour of it.
- GTCL sources questions were also raised in the report “… where is the mechanism to see if it is a fair price? Where is the competition and transparency?”
- Petrobangla’s move to award the deal to Chevron raises further questions because the GTCL board headed by the Petrobangla chairman in May had cancelled a GTCL tender to award contract to Korean company Hyundai to install three compressors with Asian Development Board (ADB) funding.
- “Gas supply through this pipeline can be increased by 50- 60 million cubic feet a day (mmcfd) by augmenting production in these fields, even without installing compressor,” says a pipeline expert. “By installing compressor, the pipeline will be able to increase only 9 mmcfd gas.”
- The above were also stated in the report of an independent consultant hired by the ADB.
- It was also mentioned that PetroBangla improperly cancelled Hyundai’s initial bid.
Then another report on August 30 announces that: “The PMO sought the project files and explanation following a report in The Daily Star revealing this fact.” The report continues: “As the prime minister sought explanation from Petrobangla chairman why he was so eager to award US company Chevron a $52.7 million contract to install a gas compressor station over the Gas Transmission Company Ltd (GTCL) system by cancelling an open tender, the chairman gave a smoky response last week…..While seeking the energy ministry’s approval late last month for allowing installation of Chevron’s compressor station over GTCL system, Muktadir ( PatroBangla Chairman) concealed the fact that Chevron had not clarified the 16 technical questions. …Petrobangla’s move to award the deal to Chevron poses serious questions because the GTCL board headed by the Petrobangla chairman cancelled in May the GTCL tender to award Korean company Hyundai a contract to install three compressors under an Asian Development Bank (ADB) fund.”
Something must have transpired during the time when the file was in PM’s office. Either PM and her advisors took an executive decision to go for the Chevron contract bypassing the cabinet purchase commitee ( On the ground that it was advance of block 12 PSC money) to expedite the process or Chevron must have made an offer to the advisor which he could not refuse.
The follow up report on this issue on September 09 states that: “The prime minister yesterday approved a Petrobangla proposal to award a $ 52.7 million contract to US company Chevron to install a gas compressor station to improve gas flow pressure in the Gas Transmission Company Ltd (GTCL) system under a Production Sharing Contract (PSC).”
Even in this report it is suggested that : “The approval was given amid a number of contradictions, including that the GTCL is not a party to the PSC and that earlier the Petrobangla chairman had a GTCL tender for the compressor cancelled to award the deal to Chevron. He has been pursuing Chevron to install the compressor station at Muchai on GTCL’s pipeline. Petrobangla’s move to award the deal to Chevron raises serious questions because the GTCL board headed by the Petrobangla chairman in May had cancelled the GTCL tender to award contract to Korean company Hyundai to install three compressors under the ADB funding.” According to the report, ” This project would also be a unique example where a PSC operator like Chevron would hold a stake in a national gas transmission system without any clear legal framework to support it, experts noted. This is also an unsolicited deal.”
According to another report on 27 October: ” No sooner had the government changed Petrobangla chairman earlier this month than Petrobangla raised questions whether installing a costly gas compressor station for Gas Transmission Company Ltd (GTCL) by US company Chevron has any justification. “
Quoting a PetroBangla official, this report asks: “with the recent increase of gas supply from different gas fields of Chevron, the flow pressure has already reached 1050 PSIG. Therefore, why should Chevron be allowed to install such a costly device and get that money out of gas production and sales from block 12?” .
The report again stresses that: “It is a sharp contrast to Petrobangla’s earlier position. Its past chairman M Muktadir Ali had cancelled an open tender of the GTCL for the same project; and strongly recommended awarding the job to Chevron under a Production Sharing Contract (PSC) for block 12. But the GTCL is not a party to the PSC, thereby leaving a lot of legal issues for the future.”
The report adds that: “…Chevron’s compressor station project cost is actually $12 million higher than the cost proposed by Hyundai at Muchai point in the GTCL tender that was cancelled… This is also an unsolicited deal that is also the first of its kind in the public sector gas transmission system, which should be a monopoly of the GTCL.
According to Daily Star’s sources, PM’s approval of the Chevron contract made many related official very uncomfortable. It reports: “… following the PM’s approval of Chevron’s project, Petrobangla invited GTCL’s experts several times to attend Petrobangla-Chevron Joint Management Committee (JMC) meeting on setting up the compressor station. But these officials declined saying that they did not want to be part of the controversy. “
Although the same reporter reporting all these loved to connect all the vices that took place during BNP’s 2001-2006 rule to PM’s son Tarique Rahman, this time, suddenly he becomes mum. No further investigation why sudden change in mind of PM office, why so much push for Chevron!
There is enough here to demand an investigation. This is not about Sajeeb Wajed or Mahmudur Rahman. This is much bigger than these individuals. And we do the nation a huge disservice by clouding the message here.
December 27, 2009 at 6:38 pm
[...] Rumi Ahmed blog on transparency and research on the actual chevron agreement [...]
December 28, 2009 at 12:49 pm
I hope you have read these articles of the Ex GTCL Director (Operations)
http://www.e-bangladesh.org/2009/12/18/controversy-surrounding-muchai-gas-pipeline-compressor-station-of-gtcl/
“We can not believe that advisor to PM and The PM’s son can be bribed by Chevron. But some person somewhere must have been benefitted in some way in the entire episode of failed Gas Transmission Development Project of ADB. For transparency the entire issue may be investigated. The Media should also act responsibly.
The failure of GTDP project as per original implementation schedule is responsible for present massive gas crisis – energy crisis. Properly structured national committee must investigate the reasons of the failure and punish the mischief mongers.
He explains further:
Unfortunately one identified corrupt senior executive of gas sector was very keen to buy expensive pipes rather than to invest on urgent compressor stations. The Petro Bangla Chairman, who was not in the game, was removed to create situation for the corrupt officials to take control. GTCL board meeting saw divided opinion. In the very first meeting chaired by that identified corrupt official GTCL proposal to ward Compressor project to evaluated lowest bidder was cancelled. In the meantime that official utilising his official capacity obtained a proposal from Chevron to build Muchai Compressor station under Cost recovery.
He also hints:
http://www.e-bangladesh.org/2009/12/21/the-scam-allegation-against-the-energy-advisor-to-pm/
PB (Petrobangla) opportunist group could successfully misguide government policy makers to cancel GTCL tender process and allow Chevron build and hand over Muchai Compressor to GTCL under cost recovery provision of Bibiyana PSC.
December 29, 2009 at 5:22 pm
Several points,
1. This article does not at all tell why Primem Minister’s lead advisor lied about the $52 million deal. The advisor told press that the deal was awarded without tender after three failed tenders without any bid. The fact is that Among ABB and Hyundai, Hyundai was selected but later the tender was canceleld by the governmnet.
2. Putting all the blame on junior GTCL officials is a very naive attempt to move the attention out of where it belongs. If you read the Daily Star reports carefully, you will notice that the contract was awarded after a decision from the prime Minister’s office ( PMO). And when the file was in PMO, there were alreday a bountyful of negative press about the Chevron deal. Still PMO went ahead with the deal. Who will believe that a corrupt junior GTCL official is solely behind such a major deal which even illegally bypassed govt’s cabinet purchase committee?
December 28, 2009 at 10:48 pm
From an engineerign point project could not have cost amount approved. So, it is not only the bribe, but, more then that has been wasted in the name of Bangladesh. The ture amount wasted would never be known. Deal was made and many were benefitted locally and internationally. This one came in picture due to Joy, many Joyless goes unnoticed to mass. Cycle of IMF, swiss bank and their global earning system are getting stronger. Think deeply, these are shell game of ‘where’ money is. They create money in vacum and tag it to nations, create inflation and keep people pondering on ‘Modern Economy’ & ‘modern banking’ system. THERE is ABSOLUTELY no way Bangladesh can ever ever ever get rid of these events. No way! No! no! In fact it will get more complex and deeper then this. If you could only see the heart of some of these people, you would see that these are their beliefs of new econmoic order. To them these are not lies, corruption or immoral, this is today. Make money and live with money. These has deeply ingrained in their conscious and now it is global mantra. And they are having good time! So bribing, project, bla bla money- all are created in vacum in INTERNATIONAL Community and then LOANED to Bangladesh and then they are getting their piece of pie BACK. This is how you put ‘tangeble values’ to ‘vacum cash’. A perfectly workable cycle which are beneftiing thousand of power people. Each of them has a nationality, but they all are drinking same cool aid to turn their blood to that cool aid.
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Violance is not the solution, but then logic, reason, honesty, descency will not take you further either. What do we do then. I HATE these people and their associate and who ever talks in favor of them. I would teach younger genration and let my friends and folks know how disgusting these individuals are. If these people ever comes to pray and stand next to me, I would request them to ask forgiveness ot all mighty and to people, else, I would not stand next to them. I would not smile at them. Wouldn’t fear them. Wouldn’t take any of their word as truth in future. They can hold any title they want, but I wouldn’t lie to myself beliving that they can bring any good to mass.
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March 30, 2010 at 2:55 am
[...] only hartal under current government was on this. And yet, many others are concerned about corruption generated by such investments. As a low investment economy, I believe we should welcome foreign [...]
June 1, 2010 at 9:23 am
[...] Mahmudur Rahman has long been a thorn on the side of this government; his paper broke the alleged corruption story between the Prime Minister’s son, Sajeeb Wazed Joy, and Chevron. Amar Desh also earned the [...]
June 1, 2010 at 3:16 pm
[...] newspaper and its editor came under fierce attack from the government and ruling party members for publishing a story of alleged corruption of current Prime Minister’s son in cohort with a powerful advisor to the PM. Over 30 defamation cases were lodged against the [...]
August 26, 2010 at 8:35 am
[...] or please the government . For publishing reports of corruption by government officials and PM’s son’s alleged involvement in one such case, this editor drew the ire of the ruling party. Because Mr Mahmudur rahman is [...]
December 22, 2010 at 5:05 pm
[...] Recently a newspaper editor dared to become outspoken against the atrocities of the government and published some corruption allegation. Hell broke loose on him. His crime— he dared speak against the government and tried to desecrate the halo around our Prime Minister and the crown prince, her son. [...]
July 20, 2011 at 10:51 pm
[...] consider the reason for the government’s ire. May be it is pure rumour mongering, may be not. One thing is certain, it took guts to challenge the crown prince the Prime Minister’s son [...]