Asia Energy says because of the upcoming monsoon, it cannot start primary development work this year as the government is yet to give a final clearance to its $3 billion development scheme.

The government is delaying the clearance as an expert committee headed by Professor Nurul Islam of Bangladesh University of Engineering and Technology designated to review Asia Energy's scheme is yet to give its report, and missed several deadlines.

Asia Energy Corporation (Bangladesh), a subsidiary of UK-based Asia Energy PLC, on October 2 last year officially presented to the government the Feasibility Study and Scheme of Development for Phulbari Coal Mine Project. As per the contract, the government was supposed to give its decision within 90 days.

Sources say disagreement among the expert committee members is one of the main reasons why the committee repeatedly missed its deadlines.

Mining operations by Asia Energy was scheduled to start late this year with first coal extraction in 2008. Full production was expected to begin by 2013.

Asia Energy officials say such delay will only frustrate the foreign investors and international financiers, who had committed a huge fund to dig out coal from Phulbari.

The company's proposals also include building a 500 MW coal-fired power plant at the mine site at an estimated cost of $ 476 million. Provision has been made for addition of a second 500 MW plant later.

Asia Energy also unveiled plans to float stock market shares in Bangladesh. The company had signed a Letter of Intent (LoI) with Merchant Bank Equity Partners Ltd for initial public offering (IPO) later this year.

RAILWAY TO EARN $2 BILLION
Meanwhile, the company yesterday presented a paper to Bangladesh Railway (BR) saying that the BR would earn more than $2 billion transporting its coal to market and its equipment and supplies to the mine over a period of 30 years.

But the BR will need to invest $250 million to upgrade its tracks and buy new rolling stock for the railway system in western zone.

David Schonfeld, Asia Energy's rail development manager, outlined the projected revenues in a presentation to BR Director General KMA Rob and senior officials. He explained the company's vision for a 'world-class western rail corridor'.

When in full operation, Phulbari coal mine will produce more than 15 million tonnes a year (Mtpa), plus an estimated 1.5 million tonnes co-products, most of which will require transport by train. Schonfeld said as a result, BR's freight traffic will grow more than six fold to 26 Mtpa from 4 Mtpa.

The company plans to export initially the bulk of its coal production-- most of it by trains to Khulna and then by barges to sea-going ships at Akram Point, and the rest directly by trains.

At the early stages, about three million tonnes of coal will be sold locally, which will be transported by trains to industrial centres such as Gazipur. As local consumption and demand increases, more will be kept back for domestic use.

Asia Energy will also use the railway to transport heavy equipment, fuel and other supplies it will have to import to operate Phulbari mine.