Setting up ETPs in sugar mills, a lost cause?

The Bangladesh Sugar and Food Industries Corporation (BSFIC) has nearly completed setting up Effluent Treatment Plants (ETPs) at its 14 sugar mills in a bid to boost revenue, but the closure of six factories has cast a shadow of doubt on the initiative’s success.

Industry insiders say the ETP installation project would likely fail as the BSFIC – which has been incurring losses for years – is setting up such plants in sugar mills that already shut their doors. Besides, these mills will not be able to use these ETPs when upgraded with fresh investment.

There are concerns that the mills that have already been shut down may not get the opportunity to reopen even if ETPs are installed there. According to project documents, the government took up the Tk 85.10 crore project 14 mills back in 2018.

It later backed out of finishing the ETP project in three mills, and amended the expenditure for 11 mills to Tk 81.84 crore in June 2022. Though the chances of this project being successful are dubious at best, the government plans to spend Tk 11 crore on this in FY23 alone.

It should be noted that Bangladesh is currently navigating troubled waters due to the impacts of the Covid-19 pandemic and skyrocketing inflation triggered by the Russia-Ukraine war.

Insiders told The Business Post that the government had initially prioritised allocation to this BSFIC project in FY23 amidst the ongoing financial crisis, as it is a daily essential commodity.

But considering the current circumstances, the government is thinking of backing out from the ETP installation project, despite already spending Tk 52.60 crore for installation of ETPs in sugar mills, they added.

Responding to a query, BSFIC General Manager (Civil) and Project Director Md Shahidul Karim said, “The government is planning to leave the ETP project at an unfinished state, and conclude the initiative.

“When the government announced the closure of six mills, the installation of ETPs was already underway there. The plants’ trial run could not move forward due to the shutdown. Under the project proposal, we were supposed to run these ETPs for three years on a trial basis.”

He added, “However, out of the remaining 11 mills, nine are still operational. Experimental ETP operations in those mills have been conducted for only a year. Now, uncertainty looms on the project, because it might get shut down prematurely.

“The construction of the ETPs is turning into a waste.”

When asked about the project’s progress in FY23, Shahidul said, “We were supposed to run some of the ETPs on a trial basis, and complete some other work this year. But the Planning Commission has not come to a decision on moving forward.

“Due to this reason, the project work has so far remained stalled this year.”

What’s the situation?

The BSFIC’s sugar production fell to a record low last season, which in turn prevented the corporation from playing a key role in regulating the domestic sugar market, which is its main task. Buyers are now paying higher prices due to the volatility in the sugar market.

According to industry ministry sources, the BSFIC undertook the project to set up ETPs at 14 sugar mills in July 2018.

The mills are Panchagarh, Thakurgaon, Setabganj, Shyampur, Joypurhat, Rajshahi, North Bengal, Pabna, Kushtia, Carew & Co, Mubarakganj, Faridpur, Zeal Bangla and Rangpur Sugar Mills.

Already, 98 per cent of ETP construction of all sugar mills has been completed as per the project plan. However, the government closed six sugar mills in FY21. Among the sugar mills where ETP constructions were nearly completed, three were closed.

An industries ministry report on the project, based on data until October 2022, the construction of ETPs in three of the six closed mills – Shyampur, Kushtia, and Pabna – has been left unfinished as per the project steering committee’s decision in January 2022.

The planning ministry approved the amended project DPP in June 2022 to complete the ETP installations in the remaining 11 sugar mills. The ETP construction of other three closed sugar mills – Panchagarh, Setabganj, and Rangpur – is progressing as per the amended DPP.

According to the latest DPP, the authorities have signed deals with Gemco and Eastern Cables for the procurement and installation of electric equipment and machinery. The project authorities have also called for tenders to install ETPs at two already closed mills.

According to BSFIC data, the cost of the ETP installation in 11 sugar mills is estimated at Tk 81.84 crore.

Tk 52.60 crore has been spent on the project till October last year. During this timeframe, the progress of financial expenditure of this project is 64.27 per cent, and physical infrastructure development is at 81 per cent.

Last July, the government allocated Tk 10.84 crore for setting up ETPs of 11 BSFIC sugar mills in FY23, including three closed ones.

According to stakeholders, the plan to set up ETPs in old mills was not a sound decision. Modernisation of these mills and renovation of factories with new technology should have been prioritised in a coordinated manner along with the ETP plan.

As a result, the stakeholders believe that these ETPs may lose their waste treatment capacity if the mills are renovated and new factories are set up in place of the old dilapidated ones.