Identifier
Created
Classification
Origin
05DHAKA2879
2005-06-20 08:27:00
CONFIDENTIAL
Embassy Dhaka
Cable title:
ENERGY STATE MINISTER RESIGNS; CORRUPTION CITED AS CAUSE
This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L DHAKA 002879
SIPDIS
E.O. 12958: DECL: 06/20/2015
TAGS: PREL PGOV ECON BG
SUBJECT: ENERGY STATE MINISTER RESIGNS; CORRUPTION CITED AS CAUSE
Classified By: P/E D. Renz, Reason(s): 1.4(d)
C O N F I D E N T I A L DHAKA 002879
SIPDIS
E.O. 12958: DECL: 06/20/2015
TAGS: PREL PGOV ECON BG
SUBJECT: ENERGY STATE MINISTER RESIGNS; CORRUPTION CITED AS CAUSE
Classified By: P/E D. Renz, Reason(s): 1.4(d)
1. (C) Summary: Prime Minister Zia demanded Energy Minister
AKM Mosharraf Hossain's resignation amidst corruption charges
of accepting a luxury car from an energy firm. Mosharraf
defends himself saying that an energy partner properly
provided the car to him and that "vested quarters" are out to
get him. While policy disagreements and friction with the
Prime Minister may have been the underlying cause, the BDG
will likely use his resignation following corruption charges
to "prove" it is committed to fighting corruption. End
summary.
2. (U) On June 18, State Minister for Power, Energy and
Mineral Resources, A.K.M Mosharraf Hossain, resigned at the
request of the Prime Minister. The resignation followed
press disclosures that Mosharraf received a luxury vehicle
from a private Canadian firm, Niko Resources. Niko Resources
is a partner with Bangladesh Petroleum Exploration Company
(BAPEX),the Bangladeshi partner in the joint venture with
Niko, and subsidiary of Petrobangla. At the time Niko
provided the car to the State Minister, Mosharraf was ruling
on liability for a gas blowout at facilities operated by the
joint venture. Mosharraf subsequently absolved Niko of
responsibility, laying the blame instead on BAPEX and its
Managing Director.
3. (U) Mosharraf is the second minister in the BNP government
to step down amid corruption charges. In March 2004,
Commerce Minister Amir Khasru Chowdhury resigned after
charges of nepotism and failure to ensure the stability of
consumer market essentials.
4. (C) Mosharraf says his use of the car was authorized,
citing BDG policy permitting senior officials to "commandeer"
donor provided project vehicles when government vehicles are
not available. In practice, this policy has resulted in the
routine conversion of project vehicles to the de facto
personal vehicles of senior officials. Mosharraf's case is
different, however, because of the close nexus between the
gift of the car for Mosharraf's use and Mosharraf's central
role in ruling on liability for the gas blowout.
5. (U) Newspapers reported the corruption charges as the
official reason for the resignation, but cited various other
factors as the underlying cause: discontent from Khandker
Shahidul Islam, Secretary to the Prime Minister, who had been
removed from the energy ministry when he tried to take action
against corrupt officials against Mosharraff's dictates;
Mosharraf seemingly always siding with foreign companies to
the disadvantage of Bangladeshi interests; his resistance to
assuring 20 years of gas supply for the Indian TATA deal
while advocating another deal to export gas to India; and his
recent trip to Canada underwritten by Niko but ultimately
paid for by Bangladeshi consumers, causing embarrassment to
the government.
6. (C) Jatiya Party MP Ghulam M. Quader commented that
Hossain's use of the car "was not a big crime" as he used the
car for government business. "While he may be corrupt", the
issue, Quader said, probably was elsewhere. Explaining that
BDG decision making is highly centralized, he said Mosharraf
as State Minister could not have acted without the
concurrance of the Prime Minister's office, which would have
demanded its share. Someone wanted a bigger share, he
speculated.
7. (C) Comment: The BNP came to power promising to increase
substantially electricity production, but has yet to bring
new production on line. As the election approaches, the
Prime Minister's office has become increasingly anxious to
address the power deficit. Energy Ministry opposition to the
Tata project and several other power projects with PMO
support has created significant friction between the PMO and
the Energy Ministry and led to the earlier replacement of the
State Secretary for Power. While the corruption charges
officially responsible for the resignation appear to have
merit, the Energy Ministry's obstruction of PMO power
projects may be a significant factor underlying the State
Minister's resignation. Nonetheless, we expect the BDG will
trumpet its actions as "proof" of its commitment to fight
corruption.
THOMAS
SIPDIS
E.O. 12958: DECL: 06/20/2015
TAGS: PREL PGOV ECON BG
SUBJECT: ENERGY STATE MINISTER RESIGNS; CORRUPTION CITED AS CAUSE
Classified By: P/E D. Renz, Reason(s): 1.4(d)
1. (C) Summary: Prime Minister Zia demanded Energy Minister
AKM Mosharraf Hossain's resignation amidst corruption charges
of accepting a luxury car from an energy firm. Mosharraf
defends himself saying that an energy partner properly
provided the car to him and that "vested quarters" are out to
get him. While policy disagreements and friction with the
Prime Minister may have been the underlying cause, the BDG
will likely use his resignation following corruption charges
to "prove" it is committed to fighting corruption. End
summary.
2. (U) On June 18, State Minister for Power, Energy and
Mineral Resources, A.K.M Mosharraf Hossain, resigned at the
request of the Prime Minister. The resignation followed
press disclosures that Mosharraf received a luxury vehicle
from a private Canadian firm, Niko Resources. Niko Resources
is a partner with Bangladesh Petroleum Exploration Company
(BAPEX),the Bangladeshi partner in the joint venture with
Niko, and subsidiary of Petrobangla. At the time Niko
provided the car to the State Minister, Mosharraf was ruling
on liability for a gas blowout at facilities operated by the
joint venture. Mosharraf subsequently absolved Niko of
responsibility, laying the blame instead on BAPEX and its
Managing Director.
3. (U) Mosharraf is the second minister in the BNP government
to step down amid corruption charges. In March 2004,
Commerce Minister Amir Khasru Chowdhury resigned after
charges of nepotism and failure to ensure the stability of
consumer market essentials.
4. (C) Mosharraf says his use of the car was authorized,
citing BDG policy permitting senior officials to "commandeer"
donor provided project vehicles when government vehicles are
not available. In practice, this policy has resulted in the
routine conversion of project vehicles to the de facto
personal vehicles of senior officials. Mosharraf's case is
different, however, because of the close nexus between the
gift of the car for Mosharraf's use and Mosharraf's central
role in ruling on liability for the gas blowout.
5. (U) Newspapers reported the corruption charges as the
official reason for the resignation, but cited various other
factors as the underlying cause: discontent from Khandker
Shahidul Islam, Secretary to the Prime Minister, who had been
removed from the energy ministry when he tried to take action
against corrupt officials against Mosharraff's dictates;
Mosharraf seemingly always siding with foreign companies to
the disadvantage of Bangladeshi interests; his resistance to
assuring 20 years of gas supply for the Indian TATA deal
while advocating another deal to export gas to India; and his
recent trip to Canada underwritten by Niko but ultimately
paid for by Bangladeshi consumers, causing embarrassment to
the government.
6. (C) Jatiya Party MP Ghulam M. Quader commented that
Hossain's use of the car "was not a big crime" as he used the
car for government business. "While he may be corrupt", the
issue, Quader said, probably was elsewhere. Explaining that
BDG decision making is highly centralized, he said Mosharraf
as State Minister could not have acted without the
concurrance of the Prime Minister's office, which would have
demanded its share. Someone wanted a bigger share, he
speculated.
7. (C) Comment: The BNP came to power promising to increase
substantially electricity production, but has yet to bring
new production on line. As the election approaches, the
Prime Minister's office has become increasingly anxious to
address the power deficit. Energy Ministry opposition to the
Tata project and several other power projects with PMO
support has created significant friction between the PMO and
the Energy Ministry and led to the earlier replacement of the
State Secretary for Power. While the corruption charges
officially responsible for the resignation appear to have
merit, the Energy Ministry's obstruction of PMO power
projects may be a significant factor underlying the State
Minister's resignation. Nonetheless, we expect the BDG will
trumpet its actions as "proof" of its commitment to fight
corruption.
THOMAS