The Jeddah-based IDB, which committed to finance a portion of the US$ 327 million project cost, was yet to find any other donor offering the remaining part of the required fund, they said.

At the request of the government of Bangladesh, the IDB sat with donors in different Middle East and Gulf countries. They were yet to give any positive feedback on the financing request, said an official of the Energy Division.

He said the cost of the Single Point Mooring (SPM) project rose to US$ 327 million from the earlier estimated $ 129 million, as a German firm conducted a thorough study about the project cost, estimated earlier in a detailed feasibility report.

“The IDB has agreed to raise its funding support to $ 220 million from the earlier committed $ 120 million, as the project cost went up. We need to confirm the source of the remaining amount of fund,” Kazi Shofiqul Azam, additional secretary of the Economic Relations Division (ERD), told the FE.

He said the IDB is still trying to convince the donors in the Middle-East and Gulf countries to fund the floating oil unloading facility.

Earlier in May 2010 the state-owned Bangladesh Petroleum Corporation (BPC) undertook the SPM project to check pilferage of imported petroleum and ensure efficient handling of the oil consignments.

That time the IDB committed to provide $ 120 million in loan for setting up the floating terminal and constructing a pipeline.

Later, the project cost was revised upward to $ 327 million in view of enhancement of the pipeline’s length by 30 kilometres from the initially-proposed 77 kilometres to carry crude oil from the offshore Kutubdia Island via Maheskhali to the Eastern Refinery at Patenga. It would help tackle oil pilferage and reduce the time for supplying oil across the country.

Mr Azam, however, said they were hopeful of getting the increased funding support from the Jeddah-based bank.

Earlier, the BPC undertook the project based on a feasibility study done by a Pakistani consulting firm. Then the cost of the project was estimated at $ 129 million.

But when experts raised some questions about the feasibility study of the Pakistani firm, the government engaged the German firm to review it.

The German firm proposed a different route for the SPM pipeline and revised the cost upward to $327 million.

On the other hand, another ERD official said the IDB would provide $ 220 million in loan while the remaining portion of the fund would be provided by the government.

On establishment of the terminal, the BPC would no more depend on other countries for handling consignments of imported petroleum oil, the Energy Division official said.

He also said the BPC would also be able to save an amount of money, between Tk 4.5 billion and Tk 5.0 billion, per year by reducing pilferage during transportation of oil and reach the break-even point within 15 years.

The terminal would be able to handle 120,000 tonnes of oil per month, officials said.

Furthermore, it will help reduce the period of oil unloading from a 20-tonne capacity lighterage ship to nine days from the existing 21 days, he added.