Namnam has been staying illegally at the project site since June 15, the last deadline for it to complete the project. Now the so-called expert service contract will give it legal coverage to finish the vital 8 percent remaining of the project.

Its proposal to employ 65 'experts' at a cost of Tk 8.93 crore for two years is now awaiting approval from the energy ministry, sources said.

But the Executive Committee of the National Economic Council (Ecnec) decided in 2003 that if Namnam fails to meet an October 2004 deadline, the mammoth project will not be revised. If necessary, the government will take a new project to finish the remaining tasks.

Yet the energy ministry violated the Ecnec decision twice by extending the contract with Namnam twice after October 2004. It is now all set to violate this decision for the third time, sources said.

While North Korea practically did not disburse any credit for this project, Petrobangla started repaying Namnam from 1997, so far to the tune of $75.24 million (more than Tk 450 crore) up to June last.

The project was originally scheduled to finish in November 1998 at a cost of Tk 650 crore under a faulty Supplier's Credit Scheme. Namnam's repeated failures to meet the deadline pushed the project cost up to Tk 1,275 crore.

Presently it is not handing over the project to the government as it has so far completed 92 percent of the job. According to a report of the project's Polish consultant Kopex, the mine can presently produce 1,000 tonnes of hard rock per day instead of 5,500 tonneswhich is the daily capacity as per the contract.

Sources also said that, out of embarrassment, neither the energy ministry nor Petrobangla have informed the higher authorities about the true status of the project. Instead they are trying to make an official inauguration by the Prime Minister.

"The best way to deal with this situation is to move Namnam out of the site and get a new contract with reliable international mining companies to finish the job. Namnam has proven again and again that it is taking a ride on the economy," said a mining expert.

Petrobangla signed the contract with Namnam in March 1994 to develop and build, commission, train and transfer the mine with a production capacity of 1.65 million tonnes of granite per year. The then energy minister, Mosharraf Hossain, played a key role in this deal, which included a faulty supplier's credit term forcing Petrobangla to start repayment within three years of the contract.

The contract price was $134 million in hard currency and $18.38 million in local currency. As per the contract, Namnam was supposed to invest 90 percent of this costor $120.60 million.

But the project actually started three years later, with Petrobangla's down payment of $13 million against the project cost. This delay revised the first deadline from 1998 to 2001. In March 2001, Namnam sought an 18-month extension with an additional pay of $16.81 million. The government gave it six months.

In December 2001, the new BNP government held a meeting with the Korean government. It finally gave Namnam an 18-month extension and $16.81 million through a supplementary contract in March 2003.

Just before expiry of this supplementary contract in October 2004, Namnam came up with a proposal for another six-month extension. This time, the energy ministry gave it a fresh deadline up to February 28, 2005. But Namnam returned again with failure, and the ministry again gave it a new deadline up to June 2005.

Presently all the installations, equipment, explosive magazines, explosives and overall security of the Maddhyapara mine are entirely lying with the contractor.

The major incomplete works of the mine include: crushing and sorting plants, a central dispatch command control system, a communication system, ventilation works, commissioning of the underground transportation system, five-stopes developments, final commissioning of the cage and skip and loading and transport equipment.

According to the contract, Namnam is liable to pay liquidated damages of $2.57 million for its failure to meet its September 2004 deadline. This is supposed to be covered by Nanman's bank guarantees. But neither Petrobangla nor the ministry did so.

Namnam has set up an 18-km roadway inside the mine in three layers at an average depth of 170 metres. So far 10 to 12 workers have been killed during the construction, mainly due to lapses in safety measures.

When completed, the Maddyapara hard rock mine will commercially sell 1.65 million tonnes of granite a year. The country annually imports 3.4 million tonnes of granite. Local production will save between $38 million to $58 million US dollars. The project has a life span of 45 years.

However, the price of Maddhyapara granite will not be cheaper than the rocks that are commonly imported from India because of the increased project cost.