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Enquiry committee on Ghorasal urea plant submits report

Profitable unit turns into losing concern

Star Economic Report
It to a sad story of a profitable industrial unft which was turned Into a losing concern.
Industries Minister Shamsul Islam Khan revealed the findings of Ghorasal Urea Fertiliser Factory Enquiry Committee which suggested that the factory in question was making a net profit of Tk 12 crore annually. But after the tag’iu'tfl^t.' rd be losing Tk 18 crore a year as the project was not viable' under the given portfolio of the contract.
The Industries Minister, addressing the newsmen at Shilpa Bhaban on Friday, outlined the summary of the findings of the enquiry committee on the Ghorashal fertiliser factory accident on June 19. 1991 In which eight people had died and 30 others tn-
The high powered commit tee comprised Dr. Iqbal Mahmud of Bangladesh University of Engineering and Technology (BUET). Hablbur Rahman. Secretaryin-charge, Science and Technology Division and Dr. Shah Mohammad Farid. Additional Secretary of the same Division.
The Industries Minister said the Ghorasa) fertilizer factory was constructed tn 1970 by Toyo Engineering Corporation on a turn key basis wtHka production capacity of 1137 tons urea a day. ITuduction started on July 10, 1970 on an experimental basis. The plant ran into trouble soon after five months and production remained suspended for one and a half year. Commercial production started tn late 1972 and since then, the plant underwent many troubles on account of faults tn its instruments.
The Minister said the factory could utilise only 61 per cent of its production capacity for random faults tn its ma chineries and spare parts. In 1974. another accident tn the ammonia control room left five people dead and many others injured
A rehabilitation programme was taken up with IDA assts tance. At an estimated cost of Tk. 53 crore, the project was scheduled to be completed tn June. 1985 But due to delay In procurement of some instruments. the project was completed in 1987 with a total cost of Tk 59 crore The factory . after Its rehabilitation, was able to make profit using nearly 111 per cent of its production capacity. Nearly 3.78 lakh tons of urea were produced in 335 days of a year. The gas use per ton was also reduced, the Minister said.
Before the expiry of the rehabilitation programme. Toyo Engineering proposed to the Bangladesh Government to raise the production capacity of the factory to 1422 tons a day from existing 1137 crore through using Advanced Cost Energy Savings (ACES) process In 1985. The company also proposed to enhance the propeople dead and many others injured
A rehabilitation programme was taken up with IDA assts tance. At an estimated cost of Tk. 53 crore, the project was scheduled to be completed tn June. 1985 But due to delay In procurement of some instruments. the project was completed in 1987 with a total cost of Tk 59 crore The factory . after Its rehabilitation, was able to make profit using nearly 111 per cent of its production capacity. Nearly 3.78 lakh tons of urea were produced in 335 days of a year. The gas use per ton was also reduced, the Minister said.
Before the expiry of the rehabilitation programme. Toyo Engineering proposed to the Bangladesh Government to raise the production capacity of the factory to 1422 tons a day from existing 1137 crore through using Advanced Cost Energy Savings (ACES) process In 1985. The company also proposed to enhance the pro duction capacity of the factory up to 2003 tons a day and the production days to be raised to 330 from 300 days
The Minister noted that factory experts and BCIC did not think the project to be viable Initially. The proposal was examined by Japan Consulting institute pCI) and Messrs Bressler. JCI recommended the project but Bressler opined that maximum attention should be given to the design of critical instruments of the project as ACES process was not used on a large scale before At this Stage. BCIC decided to go ahead with the project On December 14, the project was approved by the Planning Commission
At the initial stage, the project cost should be limited to Tk 210 crore, the Planning Commission suggested BCIC project proposal estimated the cost to Tk. 316 crore.
The Industries Minister said Toyo- BCIC. Implementation. Monitoring duction capacity of the factory up to 2003 tons a day and the production days to be raised to 330 from 300 days
The Minister noted that factory experts and BCIC did not think the project to be viable Initially. The proposal was examined by Japan Consulting institute pCI) and Messrs Bressler. JCI recommended the project but Bressler opined that maximum attention should be given to the design of critical instruments of the project as ACES process was not used on a large scale before At this Stage. BCIC decided to go ahead with the project On December 14, the project was approved by the Planning Commission
At the initial stage, the project cost should be limited to Tk 210 crore, the Planning Commission suggested BCIC project proposal estimated the cost to Tk. 316 crore.
The Industries Minister said Toyo- BCIC. Implementation. Monitoring and Evaluation Department (IMED) and Planning Commission experts differed on the Increase of urea production IMED expressed Its concern that the project would not be viable from the very beginning.
Without getting approval of ECNEC. BCIC. proposed to the Industries Ministry that a contract to this effect could be signed within Toyo Engineering. Ignoring negative comment of an official of the ministry, the proposal was submitted to the sub-commtt-tre on purchase of the Council of Ministers. On the basts of this a contract was signed between BCIC and Toyo on October 26. 1988 without approval of ECNEC.
The Industries Minister said the project got the President's approval after three months of signing of the contract which was a clear violation of the existing rules. In the face of mounting protests production capacity of 600 tons and 750 tons a day re-spectlvely. The Toyo Engineering wanted to introduce the process in 14 pro-jecU of four countries. Positive gestures were not available tn case of 12 projects There were no evidences that the process could be adjusted when the question of greater production capacity arises.
The committee felt that the assumptions upon which the BCIC thought the project would be viable were unfounded.
The report of the enquiry committee stressed that the effectiveness of the rehablllta tion scheme of 1987 should have been adequately reviewed and it would have been more realistic if a viable and realistic project could be taken up In 1994-95 or a little earlier
Industries Minister Shamsul Islam Khan was assistedI by Prof Iqbal Mahmud of BUET. Industries Secretary Shaftul Alam. BCIC Chairman Nefaur Rahman in the Press conference.