It is no longer a mere dream or a plan. Dream has started spreading the wings in the planned energy hub and trade center of the twin islands of Matarbari and Moheshkhali. The Matarbari Island along the coast of the Bay of Bengal is beaming with lights. The 600MW capacity first unit of a 1200MW imported coal-based modern power plant will start commercial operation in January 2024. A large coal carrier with around 70,000 tonnes of coal has berthed at the port. This is the largest ship ever to have anchored at a Bangladesh port. This used an 18.5-meter deep connecting channel developed for the deep seaport at Matarbari. The seaport will gradually develop along the banks of the channel. Land Based LNG Terminal (LBT) and a bulk LPG terminal will also be set up there. A few industrial zones will also be established in the vicinity. However, the government has abandoned the plan for constructing 10-12 more coal power plants in the region. Consequently, the plan for a Coal Transshipment Terminal (CTT) has also been abandoned. Japan is a major partner to develop Matarbari as an energy and power hub as well as a trading hub in the South Asia region. This is a part of a long-term ‘Big-B Initiative’ (The Bay of Bengal Industrial Growth and Economic Partnership) and MIDI (Moheshkhali-Matarbari Integrated Infrastructure Development Initiative). The outcrop of these initiatives will achieve the wider vision of turning Chattogram into a regional energy and connectivity hub by 2041. That will be a significant achievement toward transforming Bangladesh into a developed economy by 2041.
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Thirteen years from now, in 2010, Japan proposed to finance the development of Matarbari like their Kashima port. The project was conceived right then. Plan for developing Matarbari as an energy hub took its root. Bangladesh, however, planned to develop the nearby Moheshkhali Island as an energy hub as well. The plan was to set up about 10-12 medium-to-large coal power plants. The Matarbari plan included a Coal Transshipment Terminal, a Land Based LNG Terminal, a liquid fuel import hub, and a bulk LPG import terminal. For the coal supply, a CTT was in the plan. For all these, a deep enough channel for connecting with the deep sea was the major segment. Alongside the energy hub, a deep seaport will also be developed connecting the channel. Depending on these infrastructure and facilities, 8-10 public and private sector industrial zones will be set up in the adjacent areas. The channel was originally planned for 250 meters but later widened to 350 meters. Finally, the port area will be linked with the mainland by 6-lane road and railway. Keeping with the changed global perspective, the government had to make some adjustments. A plan for 10-12 coal power plants was abandoned. LNG-based power generation and renewable energy replaced the coal power plant. Japan, which was originally committed to a 2X1200 MW coal power plant, withdrew from it after financing the first unit. This has left the Coal Power Generation Company of Bangladesh (CPGCLB) in difficulty with its mega power generation plan at Matarbari-Moheshkhali.
Matarbari Multipurpose Project
The wide spans of Matarbari and Dholghata unions of Matarabari Upazilla which were used to play hide and seek with the high and low tides of the Bay of Bengal have now started getting enlivened with development. The original land surface has been raised to an average height of 10 meters. A deep wide port-connecting the channel has been developed. A coal landing port has been constructed. The conveyor belt for carrying coal from the ship to the coal storage area is also ready. The coal shed is also ready. But land development for other facilities is not developed yet. On the other hand, two FSRUs in offshore Moheshkhali are in operation. Facilities have been developed for the temporary storage of crude oil at Moheshkhali as part of the Single Point Mooring (SPM) project for easing petroleum transportation. The facilities development of Moheshkhali Island is stalled a bit following the government’s decision of abandoning 6-8 planned 1200-1320MW capacity coal power plants and 2 LNG-based power plants at 8 blocks earmarked earlier.
The Matarbari development plan got a blow from the government plan for moving out from coal power projects. Except the JICA-financed 1200MW power plant in the first phase and another 1200MW in the second phase, the government has scrapped all other coal projects. The government has made a fresh plan as JICA also moved out of the second 1200MW power plant. The government in a joint venture with SEMCROP Singapore will set up a 300MW solar park instead of a fossil fuel-based plant. Abandoning the coal power plant project on land acquired opposite Matarbari for Sumitomo may turn the project into a logger-headed initiative.
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Matarbari is the second largest investment-intensive project after the Rooppur Nuclear Power Plant project. The entire under-implementation multipurpose and coordinated project costing Tk 51,885 crore (JICA financing and own fund) is due for completion in 2026. The first 600MW unit of the 1200MW capacity Ultra Super Critical technology-using coal power plant is due to come into commercial operation in January 2024. The second unit may also start operation in June 2024. The work of the second 1200MW capacity plant was supposed to start by now. Many infrastructures required for this have already reached the final stage along with the works of the first unit. But following the decision of the Japanese government to withdraw from financing has made the construction of the second unit uncertain. Dr. Tawfiq–E-Elahi Chowdhury BB, the Energy Advisor of the Prime Minister, has criticized the decision of the Japanese government. He said that Bangladesh has not yet announced any target for net zero emissions. We have no problem using coal though we have announced a priority to low-carbon development. Hence it was not expected that Japan would move out of committed financing. He said the above in a meeting of stakeholders discussing the coordinated energy and power system master plan a few months back.
Matarbari Project under Stress of Huge Investment
Prior to looking into the financial analysis of coal power plants and the Matarbari development project let us have a view of what was in the original plan for developing the Matarbari and Moheshkhali islands as an energy hub. Matarbari was identified as the most suitable region for developing enabling infrastructure in the Bangladesh Coastal region along with a deep seaport. The original plan was for setting up a 10800 -12000MW coal power plant and 1500-2000MW LNG-based power plants by 2041. For facilitating these, a 14.3 KM long, 250-meter wide and 18.5-meter deep link canal with the deep sea was planned. One coal and another jetty for the general purpose were also in the plan. It was conceived that a LBT, Bulk LPG terminal, CTT and some industrial zones will also be developed taking advantage of the port facilities. The total project cost was estimated as Tk 35 thousand 954 crores. But later following the decision of developing a deep seaport there, the width of the link canal was widened to 350 meters. The project cost was revised to Tk 51 thousand 855 Crores. CPGCLB signed an MOU with Chattogram Port Authority (CPA) and other port users for this. But in the middle of 2022, the government in the name of environmental protection decided not to implement 7 of the 9 originally conceived projects. Of these five were at Moheshkhali and two at Matarbari. The two of Matarbari were CPGCL-SEMCROP JV 1200MW and CPGCL-SUMITOMO JV 1200-1320MW. Work on converting the planned coal project to LNG of the CPGCL-SEMCROP has started. A decision has been taken to allot the land acquired for the other project to Orion Group for relocating their planned coal project from Dhaka there.
Consequently, no study has been done yet for working out the cost of coal power considering all other users utilizing the facilities and sharing the cost of channel development. Relevant experts believe that the cost of generation will be much higher than estimated even after setting up the 2nd 1200MW unit at Matarbari. That will create additional financial stress on BPDB as a single buyer. A plan for setting up CTT there was drawn considering the requirement of 19 power plants well before scrapping the plan of 10 power plants. Japanese company Sumitomo expressed interest in developing CTT in a JV with the government. CTT would have an annual capacity of 28 million tons. In phases, it was planned to reach full capacity by 2030. Coal could be transferred from the coal jetty using a conveyor belt. Now only three projects are alive. The 1200MW first unit is on the verge of completion, the fate of the second 1200MW is still hanging in the balance as the government has not yet decided on an alternate implementation. It has been learned that Orion Group will use the jetty if they implement their project there.
Abandoned CTT, LNG and LPG Terminals
The justification for the proposed CTT planned at Matarbari was that there exist no deep seaport facilities for the transportation of coal for 4000MW Payra, 1320MW Rampal and 1248MW capacity coal power projects. Imported coal from Matarbari CTT could more economically be transshipped to all these plants. After scrapping the 10 coal power projects at Matarbari and Moheshkhali, the future of CTT has become highly uncertain. Meanwhile, Bangladesh Petroleum Corporation (BPC) has decided to set up a bulk LPG import terminal at Matarbari using the Matarbari port connecting channel. RPGCL, a Petrobangla company, is proceeding with its LBT project there. Companies have been shortlisted for this work. The project company is expected to be selected within 2023 and work can start in 2024. Per the plan of EMRD, the first unit with a capacity of 1000 MMCFD may start operation in 2027. CPA has finalized a plan for developing a deep seaport along the channel. A feasibility study has also been completed for it. But fresh complexity has arisen with LNG and LPG terminal development. CPA wants to develop terminals for BPC and Petrobangla. The LNG terminal development will be further delayed if this issue is not resolved soon. Consequently, when the LNG-based power plants are set up at Matarbari and Moheshkhali these will suffer from gas supply issues. Japanese Company Zara has signed a US$2 Billion investment plan with Summit Group for the LNG plant.
Matarbari Now
From a recent visit we have seen the 100 meters widening of the port connecting the channel with the deep sea has been completed. Two jetties are also ready. Installation of conveyor belts and enabling facilities for unloading coal from coal carriers will be completed on time. The pipelines for the intake and disposal of water from the power plant are also constructed. Two boiler houses and turbines are also in place. Installations of turbines and boilers are in progress. Project official Rafiq informed us that the tree planting for greening the area will start. 10,300 people including skilled, semi-skilled and unskilled manpower are working now. Of them, 8000 are Bangladeshis. They are growing expertise with experience. In the future, they can contribute more to similar works. Engr. Abul Kalam Azad, Project Director mentioned that all international codes and standards are being complied with at every stage of construction. The plant will be more visible towards the end of 2023.
Many organizations will use the channel. The thoughts for creating a company for channel operation are there. No officials agreed to comment on whether the channel will become a burden on the company if the second unit of 1200MW is not ultimately constructed. But an official of the Power Division informed EP that many facilities of the second unit are being constructed along with the first unit. As such, the government is able to invest in the second unit. Experts also agreed that the government can do that. But he suggested delaying it a bit after considering the present state of the US Dollar.
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Japan’s Economic Diplomacy Involving 8 Indian States, Bhutan and Nepal
The relevant expert observed that the connectivity of the northeastern regions of India with Bangladesh is a major focus of strategic investment by Japan, which has already made a significant investment in the connectivity in the regions of the two countries. Over the past decade, thousands of crores of US Dollars have been invested in developing connectivity only. Investment in Northeast India has exceeded US$200 Billion. Chattogram region occupies a major portion of Japanese involvement in regional connectivity.
Japanese Prime Minister Fumio Kishida during his recent India visit informed about additional investment. Speaking at a program during his visit he said, “Landlocked region has huge unexplored potential. These have not been utilized. We are considering the southern region along with Bangladesh as an integrated economic region. We want to develop the idea of the Bay of Bengal-North- East Industrial value chain through collaboration with India and Bangladesh. This can make significant economic development for the entire region.”
He further said, “Bangladesh will soon elevate from a least developed country. We have already formed a joint assessment committee for identifying areas of new economic partnership between Japan and Bangladesh."
During the discussion between Prime Minister Sheikh Hasina and Fumio Kishida in Tokyo in April the possibility of developing Chattogram as a regional trade and commerce hub has been given due attention.
Northeastern India is among the hotspots of global geopolitics in South Asia. The region connecting the south and southeast is mostly landlocked and has remote difficult terrain. In the past, in Indian politics, the bottom line of Indian foreign policy for South and Southeast Asia was “Look East”. Expanding scope and dimensions have turned into “Act East”. Aligning with this, Japan in its regional strategy has decided to adopt Geo-Political and Geo-economic strategy. Japan and India have set up the “Act East Forum”.
The Japan International Cooperation Agency (JICA) provides loans and grants for connectivity and other projects. According to JICA, till September 2021 for Northeastern India alone, JICA invested 24,600 crore yen. The target was mainly to develop connectivity with Bangladesh. JICA provided loans in five sequential steps in the northeastern connectivity development. Under the scope, 650 KM of priority roads of national highway development and construction are underway.
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A 19 km-long bridge is being constructed from New Dhubri in Assam to Fulbari in Meghalaya. JICA has provided funds for the longest bridge in India. When completed, it will assist in transporting export commodities and carry passengers from Bangladesh to Bhutan through India. A road is being constructed from Tura to Dhalu in Meghalaya. The existing two-lane highway from Shillong to Dauki in the same state is being upgraded to 4 lanes. The projects aimed to create connectivity between Meghalaya and Bangladesh are funded by JICA.
Road reconstruction and improvement from Srirampur to Dhubri are also advancing. This road is also aimed to create connectivity between Assam and Meghalaya with Bangladesh, Nepal and Bhutan.
Connectivity has grown into an important aspect of the Indo-Bangla relationship. The connectivity projects have attained fresh momentum after Bangladesh extended facilities to Northeastern Indian states using the port facilities of Chattogaram and Mongla. Japan has become the development partner of both India and Bangladesh.
It has appeared in a write-up of Saito Mitsunari of JICA Head of India in ORF foundation that the opportunity created through connecting Chattogram port and Matarbari deep seaport with Tripura in the east and northeastern states has opened avenues for developing the communication corridor of two countries. JICA is making a contribution to developing and improving roads connecting Koilashohor to Khoai. The regional trading between India and Bangladesh is now at a very low level. Creating easy transportation of people and commodities, this project is going to make a significant contribution to the socio-economic development of the region. In 2019, about 19 lakh people moved along this road. 9500 tonnes of commodities were transported. When the project is completed the persons availing the facility may grow to 47 lakhs. The commodities to be transported will be 33 lakh tonnes. JICA also assisted in constructing the bridge from Ramgarh to Baroihat in Bangladesh. India is assisting Bangladesh in constructing a road from Ramgarh to Chattogram for a smooth flow of traffic between the two countries.
Northeastern India has eight states. These are also called seven sisters (Assam, Arunachal, Manipur, Meghalaya, Tripura, Mizoram and Nagaland) and one brother (Sikkim). In India, this region has the most ethnic and geographic diversity. The eight states are considered the most sensitive states of India in matters of geopolitics. 98% of the bordering area of Northeast India covering 5182 Kilometers is international. This region borders Bangladesh, Nepal, Bhutan and China. The remaining 2% borders are with other Indian states. The total area is 2 lakhs 62 thousand and 230 Kilometers. This is about 8% of India. Though rich in petroleum and mineral resources, it lags far behind the rest of India in infrastructure. The 220 ethnic communities comprise a population of 4 crore. Experts observe that keeping the linkage with Bangladesh there is an opportunity for integrating Myanmar with the development. But before that, the Rohingya issue must be amicably resolved.
From the statements and observations of JICA officials at different times it appeared that Dhaka–Chattogram–Cox’s Bazar Road communication needs further modernization for developing the trade, business and energy sectors of the region.
Experts believe Bangladesh has the opportunity for benefiting most from the investment discussed above. The essence of this development is connecting our region with ASAN Countries through Northeastern India. The main focus is increasing connectivity around the Indian Ocean. Bringing investment for Japan here is easy as Japan is a brotherly country of both India and Bangladesh.
Prime Minister’s Tour of Japan
Bangladesh Prime Minister Sheikh Hasina during her three-day Japan visit urged the Japanese investors to invest massively in Bangladesh as Bangladesh is the most ideal destination for investment in the region. She said: “Come, See, and Invest”. On the other hand, a large Japanese investor Zara signed a US$2.0 billion investment agreement with a Bangladeshi company summit group in her presence. This investment they want to make for a land-based LNG terminal at Matarbari and an LNG-based power plant. Marubeni Corporation has a plan for setting up a bulk LPG terminal with BPC on the island. The government and private sector are informing about Japanese investors’ interest in greater Chattogram industrial areas. They are of the opinion that after meeting Bangladesh’s needs, the products can be exported to the Northeastern states of India, Nepal and Bhutan. At the same time by utilizing the Matarbari deep sea facilities, the entire region will be extremely benefitted. Finally, when the Rohingya problem is solved, they can also be integrated with the development process. Bangladesh will become the greatest economic hub of the region by utilizing the unique geographical location of greater Chittagong.
Conclusion
Bangladesh is working on a vision for reaching the developed economy status by 2041. It has earned the graduation to the level of a developing nation from a least developed country. All development activities are proceeding on a plan. For this Matarbari and Moheshkhali are being developed as a gateway of development. Without any semblance of doubt, Japan is almost the standalone development partner of this endeavor. Since independence, Japan has provided US$288 billion to Bangladesh as loans, grants and assistance. It is expected that Japanese loans and investments will grow as per the present plan. However, alongside the infrastructure development, the energy and power hub development plan at Matarbari and Moheshkhali needs revisiting in the context of global reality. Sustainable energy security has no alternative. Within the next 3 years, the deep seaport at Matarbari will be visible. Within the next 5 years, land-based LNG terminals will start operations. A 1200MW coal power plant will start generation in 2024. Within 2030, 1-3 LNG-based power plants may come into operation. About 300MW grid-connected solar plants will also be there.
If the present momentum can be maintained, by 2030 Matarbari and Moheshkhali as well as Cox’s Bazar will appear as a major development hub. It will take up to 2041 to get a complete shape. It is expected that by 2050 Bangladesh will be the major economic hub of South Asia.
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