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Download PDF The prospective entrepreneurs are shying away from investing in the CNG sector due mainly to bureaucratic red tape, although demand for the fuel is increasing fast following skyrocketing prices of petrol and diesel.
Moreover, conversion of vehicles into CNG-run ones is on at fast rate, while the supply of CNG (compressed natural gas) is not increasing as per demand. If the trend continues, the capital may soon suffer serious fuel crisis.
It often takes several years to launch a CNG refuelling station as the government offices concerned miserably lack coordination.
Industry insiders said over 100 applications for setting up CNG stations are kept in the cold storage in different departments because of slow and complex procedures.
To set up a CNG refuelling station, one has to get approval from at least nine departments and agencies — Rupantarita Prakritik Gas Company Limited (RPGCL), the Department of Explosives, the police commissioner (traffic), the Deputy Commissioner’s (DC) Office, the environment ministry, the Roads & Highways Department, gas company of the respective areas, municipality and the communications ministry.
Regarding the hassles in getting approval from these offices, aggrieved entrepreneurs said a file has to pass through 64 tables in the R&H Department alone. They alleged the officials sometimes delay intentionally with ill motives.
According to the RPGCL, there are 1.9 lakh CNG-run vehicles in the country, most of which are running in the capital. These vehicles put tremendous pressure mostly on the 91 CNG refuelling stations located in and around Dhaka. Notably, there are 161 refuelling stations in the country.
Sources in the RPGCL said at least 55,000 CNG-run vehicles run in the capital, which refuel at the 91 stations. On an average, there is one refuelling station for over 600 vehicles.
Other sources said the actual number of CNG-run vehicles running in the capital varies from 1 lakh to 1.14 lakh. These vehicles have to queue up to get fuel. But the situation worsens in the wake of frequent power disruption in the capital.
They said once the RPGCL approves a plan, it requires approval of the Department of Explosives. There are numerous instances the Department did not consider the RPGCL-approved plans and suggested further modifications, they said.
Similarly, the RPGCL also asked the entrepreneurs to modify layout plans approved by the department, the sources added. The cycle continued when the department reiterated by bringing changes to the plans before final approval.
The department finally okays a plan in two phases — first they inspect the spot before installation and then gives permission after the installation is completed.
The department officials admitted that differences of opinions between the RPGCL and their office are rife.
Executive Director of CNG Association of Bangladesh Nurul Alam cited two such instances — one in Chittagong and the other in Sylhet — where this conflict hampered launch of two stations.
A number of entrepreneurs said the government encourages CNG-run vehicles mainly on environmental grounds. The requirement of an extra approval from the Department of Environment is then totally unnecessary, they argued.
If someone wants to upgrade from petrol pumps to CNG stations, why they should obtain ‘no objection certificates’ from the Deputy Commissioner’s Office, they asked.
Like the DC office, at least eight more agencies including the Fire Service and Civil Defence, Rajuk or municipality, R&H, metropolitan police seek similar documents.
Though the DC office gives clearance to use the land further approval is needed from the R&H and Dhaka Metropolitan Police, they added.
A prospective entrepreneur also needs R&H approval for the strip of land that is needed for drive-in and drive-out of the CNG station. Even in case of upgrading existing fuel stations, which already use the strip of land, the approval is needed once again.
The entrepreneurs expressed their dissatisfaction saying if no permission is required for other private construction, there is no reason it should be applicable only for CNG refuelling stations.
A communications ministry review committee with representatives from the departments concerned was supposed to settle the problems regarding establishment of CNG refuelling stations.
But the committee failed to bring any positive change as the members did not have the authority to approve anything on behalf of their departments.
The RPGCL does not have any statistics regarding how many vehicles are being converted every day across the country. But industry insiders said owners are increasingly converting their vehicle due to repeated price hike of petrol and diesel.
They also said around 150 vehicles on an average are being converted every day. If the trend continues there would be tremendous pressure on the existing CNG stations and a severe CNG crisis is likely in a few months.
Some of the entrepreneurs also expressed their dissatisfaction over the RPGCL’s dual role. It runs CNG conversion workshop and refuelling stations while being a regulator in the sector at the same time. A competitor in the market cannot assume the role of a regulator, they noted.
Contacted, RPGCL Managing Director Abdul Wadud said: “We don’t compete in the market; we have only a CNG conversion unit and a filling station, which are used mainly on training purpose.
“The RPGCL does not have any plan to expand its businesses and unlike other business enterprises it provides most of service free of cost, even the forms and constancy are free,” he claimed.
He also said as of April 2007, 316 companies got permission for setting up new CNG stations. Of those, 150 are on operation and 66 opened Letter of Credit in the banks which are likely to start operation within next six to eight months. The rest are in the pipeline, he added.
Admitting the existing conflict regarding approval, he said this would be solved if the departments and agencies sit together and jointly gave permissions.
Contacted, Communications Secretary Mohammad Mahbubur Rahman said they would soon shift all responsibilities to the energy ministry and take measures to simplify the procedures.
He expressed the hope that the energy ministry would start a one-stop service for launching CNG stations to speed up the entire process.
March 11th, 2008 at 9:39 am
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