Energy & Power

Seminar

Power Crisis and Political Commitment
SM Salahuddin

A strong political commitment and a master plan, which must not be changed with the change of government and interference of the donors, are indispensable for development of the power sector of the country.

Former chairmen of Bangladesh Power Development Board (PDB) and private investors in power generation said this on February 27 blaming the lack of political commitment for the present severe crisis in the electricity sector.

They also said that a deputy or state minister is not enough for running the sector smoothly. They suggested a full minister for the sector whose statement will get attention to the Parliament as well as the top policymakers, including the Prime Minister.

The Forum for Energy Reporters Bangladesh (FERB) organized the discussion on "Ongoing Power Crisis: Way to Overcome" with its Chairman Mollah Amzad Hossain in the chair at the Dhaka Reporters' Unity auditorium.

ANM Rizwan, the PDB chairman who took over the charge recently, told the meeting that he did not face any political interference so far. "But I will run by my conscience if any such pressure comes up."

Referring to a corruption charge brought against a former PDB chairman, he said: It is because of his (former chairman's) initiative that major Ashuganj plant is generating additional 150 megawatt, but he is in trouble for the step.

"If the PDB can work independently what it is not enjoying at present, the ongoing power crisis might not be faced," he said adding "We are willing to take challenge to face the present power situation although nothing can be changed overnight."

He stated that they would be able to add about 500 MW of power by March 30 through repairing some of the suspended units out of 21 units having 980 MW of generation capacity.

"During the coming summer, electricity demand will be more than 4500 MW but we cannot generate over 3,500 MW leading to about 1000 MW shortage. We have to accept the reality," he said.

Rizwan, however, assured that irrigation would not be affected as they had been supplying power around 8 hours in a day to irrigation areas.

He assured that in next 8-9 months, over 400-500 MW would be added in the national grid through setting up of trailer mounted plants with a capacity of 360 MW and some small power plants with the total capacity of 200 MW.

The PDB chairman categorically said the government should increase the tariff of electricity to help PDB recover from incurring loss.

Aziz Khan, Chairman of Summit Group, said that the country is longed for a powerful minister for the Power Ministry to accelerate its function according to its demand.

He also urged the government to take steps to stop illegal power consumption through deploying 15 magistrates that can save up to 400 MW of electricity.

Electricity should be supplied in rural areas as main food grains are produced there, he said, adding that the country could also import hydro-electricity form Bhutan or Nepal.

Nuruddin M Kamal, former Chairman of PDB, suggested setting up power plants with capacity of 1,500 MW in the country's western zone.

At least six to seven small power plants with 100 MW capacity should be set up through individual bidders, he said.

The power sector would not be developed as it saw change of five chairmen of PDB and four secretaries of the ministry within last two years, Kamal said.

Jafrul Hassan, CBA Secretary of PDB, said that the power sector as well as its staff are suffering from frequent "policy reform" by the pressure of donors but PDB itself has no proposal as well as no strong stand.

He said workers and employees are often blamed for resisting so-called reform programs. It frustrates the employees and they lose motivation to work,‘ he said.

He said “If there was stability in the administration there would have been some accountability too.”

He said several quarters in the government said lack of investment was hindering power generation and thus creating power crisis. “But I think there is enough money with the government exchequer to generate electricity. The power sector is not developing due to a bureaucratic tangle.”

He said power crisis would worsen next year. Even if a decision is taken today to set up adequate number of power plants for meeting the power demand in years to come, the plants would come into operation after two or three years.

Jafrul, who is also the general secretary of the Jatiyatabadi Sramik Dal, said conflicts in each of the organizations under the Power Division had created uncertainty in the minds of employees and none knows where the power sector is heading.

"Uncertainty is prevailing among the officials and employees of the Power Development Board. You cannot expect better performance from them when there is uncertainty," he said.

There is intra-organizational conflict in almost every agency under the Division. "Even the relations among the minister, secretary and boards are not healthy," Jafrul said.

He said the financial condition of the power board is dismal as it pays power bills to power plants but the power agencies, like the Dhaka Electric Supply Authority, do not pay their bills to the board.

Former PDB chairmen Shamsul Islam said that the power crisis has aggravated as thousands of kilometers of electricity lines were given on political grounds although generation has not increased to match the expansion.

He said no full minister has so far been appointed in the power ministry for years although it is a vital ministry.

Shamsul Islam, however, urged all not to get disappointed about the present power situation and hoped that the condition would improve.

Moazzem Hossain, President of Energy Association, said the government should not be rigid in making ground for foreign investors in an emergency basis to avert the crisis. "We can provide 300 MW to 400 MW electricity by three months if the government wants," he assured.

Brigadier M Maleque, former chairman of PDB and REB, STS Mahmud, former Chairman of DESA also spoke on the occasion. Mahmud Hafez, Executive Director of FERB presented a concept paper.

IPPs Threaten to Suspend Generation if Dues not Paid

Rozina Islam

Six independent power producers (IPPs) have threatened to suspend power generation if their dues are not paid. In a letter addressed to Bangladesh Power Development Board (BPDB) in late February, the IPPs gave an ultimatum for the payment, sources concerned said.

The sources said that the accounts receivable of the IPPs from the BPDB is about Tk 250 crore.

The ultimatum from the IPPs came at a time when the country has been going through serious power crisis with average 1,500 megawatt loadshedding every day. The IPPs generate 1,260 MW electricity, which is one third of daily generation of the country.

Of the IPPs, KPCL supplies 110 MW, Baghabari 90 MW, Haripur 110 MW and 360 MW, Meghnaghat 450 MW and Mymensingh 140 MW.

In a situation like this the BPDB assured the IPPs that they will get the arrears by the end of March. “We informed the IPPs that we will make the payment shortly,” said BPDB Chairman ANM Rizwan.

Officials said that the BPDB could not make the payment in time, as it has not been getting timely payments from its clients. The BPDB has asked its clients -- DESA (Dhaka Electric Supply Authority), REB (Rural Electrification Board) and PGCB (Power Grid Company Bangladesh Limited) -- to make payment of their arrears.

Besides, the officials said, the BPDB requested the DESCO (Dhaka Electric Supply Company Limited) for two months‘ advance.

Sources concerned said that the PDB has been suffering from liquidity crisis for not raising power tariff since 2003, devaluation of taka against dollar, high cost of power of IPPs and rise of wheeling charge in 2004.

“We could not make payment to the IPPs due to the liquidity crisis,” said a senior official at the BPDB.

The debt service liability of the BPDB to the gas companies and oil companies as well as the IPPs and government has stood at Tk 701.48 crore. Due to the rise of dollar price against taka, the BPDB has been also paying more against the credit provided by the donors.

Also, officials said that the loss of the BPDB has been increasing. The net loss of the state-run organization stood at Tk 678 crore in 2004-05. If this situation continues, it will be impossible for the BPDB to meet payment of the IPPs on time, they said.

According to a BPDB report, it has been found that the generation of the BPDB has been declining since 1998-99.