The government has cancelled its deal with Summit Group for the construction of the second Floating Storage and Regasification Unit (FSRU), which is a noteworthy move. According to Zanendra Nath Sarker, the chairman of Petrobangla, the termination was carried out as directed by the Ministry of Power, Energy, and Mineral Resources on Monday.
Summit Group has acknowledged receipt of the termination notice relating to the FSRU’s terminal usage agreement, expressing their intention to fight the decision, which they think unwarranted.
Summit Group underlined that it has a well-established reputation for responsibly and transparently creating long-term infrastructure projects in Bangladesh. Signed on March 30, 2023, the first deal comprised a sale and purchase agreement for the delivery of 1.5 million tonnes of LNG per year for 15 years, starting in October 2026, as well as a terminal usage agreement.
Alongside these developments, the Bangladesh Financial Intelligence Unit (BFIU) has instructed banks, as part of a money laundering prevention strategy, to freeze the accounts of Summit Group Chairman Muhammad Aziz Khan and his family members for a duration of one month. This instruction extends to the accounts of companies owned by these persons, affecting their transaction capabilities during this duration. Eleven people were named in the BFIU letter as well, including Muhammad Faruk Khan, the former minister of commerce, and Faisal Khan, the president of the Bangladesh Independent Power Producers Association.
Summit Group, Bangladesh’s largest private power generator, was perceived as receiving preferential treatment under the Awami League government that was overthrown. However, several regulatory organisations, including the National Board of Revenue (NBR), are now scrutinising the company more closely. Summit is one of the seven business houses for which the Registrar of Joint Stock Companies and Firms has been asked by the NBR to stop share transfers.
Summit Group is a major supplier of LNG to the government and presently runs one of the two floating storage regasification plants in the nation.