January 3, 2013

Bitumen Shortage in Bangladesh

Bitumen crisis has hit road and highway construction and maintenance across the country, mainly the Dhaka-Chittagong and Dhaka-Mymensigh highways' four-lane construction work, making timely completion of both projects uncertain.
Officials said the crisis of bitumen, which is an essential ingredient for road construction, had led to holding an emergency meeting at the Prime Minister's Office (PMO) last month with the principal secretary in the chair. They said all stakeholders including the Roads and Highways Department (RHD) and the Local Government Engineering Department (LGED) also sat with the Bangladesh Petroleum Corporation (BPC) and the Eastern Refinery Corporation last week to find out a solution to meeting the growing demand the bitumen.
Bitumen is a byproduct produced refining of oil, and the Eastern Refinery is the major local source of the ingredient.
RHD officials said the demand for bitumen had increased in the current fiscal year as both Dhaka-Mymensingh and Dhaka-Chittagong highways need a huge quantity of this ingredient to carpet several hundred kilometres of roads with the beginning of the dry season, the peak construction season.
"As this year has been crucial for the Dhaka-Chittagong four-lane project as well as for the Dhaka-Mymensingh highway project for starting carpeting, the demand has risen," said a Communications Ministry official who attended both the meetings.
He said the local bitumen production and the imported bitumen also could not meet the demand.
According to RHD and BPC, the bitumen demand - supply gap this year has peaked to 80,000 tonnes as 70,000 tonnes are produced locally and another 50,000 tonnes are imported on an average.
Officials said RHD's yearly requirement had been assessed at about 150,000 tonnes followed by 26,000 tonnes of the LGED. Besides, all city corporations need a handsome amount of bitumen. The Aviation also requires a portion of the bitumen.
But against the total demand, 60,000 tonnes are needed only for carrying countrywide maintenance work this year while the Dhaka-Chittagong four-lane highway project will need around 70,000 tonnes of bitumen by the end of 2013.
As Communications Minister Obaidul Quader has set the monthly target of carpeting the 193-kilometre Dhaka-Chittagong highway, project officials said over 18,000 tonnes would be required by April for the four-lane road project.
When asked, the minister told the FE that efforts were made to overcome the crisis.
However, contractor sources said the crisis would turn more acute in the coming days due to the lack of efforts by the government.
They said the capacity of Eastern Refinery had been limited to 70,000 tonnes of bitumen since inception.
A contractor, who has been engaged in constructing both national highways and regional roads since the 90s, said due to corruption in distribution of bitumen by different agents of the Eastern Refinery, the crisis got worse forcing them to buy it at an exorbitant rate.
"Bitumen crisis is always there in the country due to a gap between the demand and supply, but it has become acute due to the lack of control over distribution process since 2004," he told the FE adding that the condition was likely to get worse in absence of efforts to increase the Eastern Refinery's production capacity.
An RHD official of Khulna zonal office said, due to the crisis getting bitumen on time is nowadays not possible forcing the contractors to manage it from importers at higher prices.
At present, bitumen is being sold at around Tk 70,000 per tonne. In the 90s, the price varied between Tk 5000 and Tk 6000, which increased to Tk 10,000 to Tk 12,000 due to the Iraq war.
The ministry concerned and RHD officials said the overall crisis had been discussed in the PMO's meeting, and directives were given to prioritise RHD's work mainly for the two important four-lane highway projects.
"As RHD accounts for 66 per cent of the total demand, a decision was taken to give priority to RHD projects," said the RHD official adding that they had to verify the work order.
However, sources said with the start of using bitumen by big projects like the two four-lane highway projects, another crisis would hit the small projects hampering overall development of road network in the country.
The RHD itself is at present implementing 153 road and bridge development projects. 

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