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Gas crisis threatens to derail Bangladesh economic growth

Gas crisis threatens to derail Bangladesh economic growth
AFP
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First Published: Mon, Sep 08 2008. 10 59 AM IST
Updated: Mon, Sep 08 2008. 10 59 AM IST
Chittagong: An acute gas supply crunch caused by lack of hydrocarbon exploration is threatening to derail Bangladesh’s record industrial expansion, officials say.
The South Asian nation’s economy has been growing by more than 6% annually over the last four years - its strongest pace since independence in 1971, thanks to unprecedented double-digit manufacturing growth.
But industrialists say trouble looms as a severe gas crisis has left scores of big factories without power and halted some of the impoverished country’s most ambitious industrial projects.
“The gas crisis has become our biggest concern,” the chief of the garments manufacturers’ association Anwar-ul Alam Chowdhury said.
Some 500 factories were now on the verge of closure due to the crisis, he added.
Garment shipments, which accounted for 76% of the country’s $14.1billion worth of exports in the financial year to June 2008, have been the key driver of Bangladesh’s strong economic showing.
Now this performance is at risk, industrialists say.
Bangladeshi factories have been installing gas-fired generators and small power plants at a furious rate as the state-owned power company can meet only 60 percent of the nation’s daily electricity needs.
In the nine months to March, at least 211 manufacturers installed gas-fired generators, up from 35 in the previous 12 months, said Jalal Ahmed, chairman of state-owned gas supply monopoly Petrobangla.
As a result of increased industrial use, the country is experiencing a shortfall of around 250 million cubic feet of gas a day with overall daily demand of two billion cubic feet, Ahmed said.
Hydrocarbon-rich Bangladesh had proven gas reserves of 15.37 trillion cubic feet, an amount which the government had considered enough to last until 2025.
But with the manufacturing sector logging annual growth of around 10% since 2005, more than half the gas reserves have been consumed, Ahmed said.
With the supply crunch getting severe, the government has suspended supply to scores of new factories and started rationing.
The southeastern port city of Chittagong is Bangladesh’s main economic hub.
“More than 50 new plants here could not start operations due to gas crisis despite investing hundreds of millions of dollars,” he said.
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First Published: Mon, Sep 08 2008. 10 59 AM IST
More Topics: Bangladesh | Gas | Energy | Economy | Industrialisation |