"The direct effect on [the] GDP is expected to be US$7.8 billion over the life of the project," projects the study conducted by an international professional services company named GHD. "The indirect or multiplier effects are expected to be US$13.7 billion. This gives a total GDP increase of US$21.4 billion," it estimates.

"The mine and power station development is expected to contribute up to an additional one per cent to [the] GDP. This represents an average of US$0.7 billion addition to [the] GDP per year," a press release says quoting the study report.

Asia Energy is now seeking government approval to developing an open-pit coal mine with a 15 million tonne annual production capacity at Phulbari in the northwest district of Dinajpur. The project also includes setting up of a 500 MW coal-fired power plant, which will be upgraded later to a 1,000 MW plant.

In the 30-year project life, Asia Energy plans to invest an estimated $3 billion capital on the mine and the power plant, and to spend $10.4 billion in operating costs.

According to the press release, the UK-based company will earn $7 billion from the project and the government $1.2 billion in royalty and $2.8 billion more as corporate tax. Besides, Bangladesh Railway, Mongla Port Authority, Income Tax Division and the customs department will make $3 billion earnings, it says.

"The project is expected to contribute significantly to the development of the Bangladesh economy by adding up to 10 per cent to the country's energy supply by 2015," the study claims, adding, "The productivity and business growth impacts will be very significant. The US$13.7 billion indirect impact over the life of the project is likely to materially underestimate the benefit."

According to the GHD release, "The effect of this development is expected to radically improve the social and economic wellbeing of the local, regional and national community in Bangladesh," in areas as diverse as job opportunities, health facilities and general literacy.

GHD reckons eight to 10 additional jobs would be created for every direct employee of the project. In the construction phase, the project will employ about 2,100 people. When the mine becomes fully operational it will employ 1,200 people along with 450 others in barging and shipment operations in Khulna.

The project also will effect a total expenditure of $314 million on railway and port development to provide a reliable export route, says the GHD release.

According to GHD projection, $4.2 billion will be pumped back into the Phulbari project area, including $310 million for resettlement and relocation of part of Phulbari Township and the surrounding villages.

There will also be programmes to boost the local agricultural production and to re-cultivate the land back-filled after the mining. A major operation will also be there to inject water drawn from the mine into the nearby fields by laying a pipeline network of over 100 kilometres in length.

Asia Energy, which operates in Bangladesh under a government contract, has identified a resource base of 572 million tonne high-quality thermal and semi-soft coal in the Phulbari basin. The plan for mining the coal received environmental clearance in September last year. The pre-mining activities are scheduled to start later this year. The coal production is expected to begin in late 2008 and, through rapid increment, the production is projected to reach 15 million tonne per annum by 2013.

GHD has extensive experience in working on and evaluating major infrastructure projects. It used a multiplier of 1.75 for the indirect impacts, which it terms conservative, given that multipliers in terms of spin-off industries and service sector growth for similar large-scale projects around the world range from 1.5 in highly developed economies to 3.5 in poorer, subsistence ones.

The multiplier effects included development of industries from the mine's valuable co-products but did not take into account any contribution from the foreign exchange savings from local coal substituting imported ones. The forex savings over the project life will be to tune of $3 billion, GHD says.