Energy & Power

Snapshots

DESA Posts Profit 15 Years After Birth

Dhaka Electric Supply Authority (DESA) has started to make profit after 15 years of its inception. DESA has earned an impressive profit of Tk 5.0 crore in 2005-2006 fiscal, after meeting all its expenses including the operational cost, payment of electricity purchase bill. It is a turning point, for an organization whose image was that of a corrupt organization.

"Nowadays, things are changing. We have improved customer service in our organization and the consumers want to become 'good clients'. New things are happening from both sides after mid January", Md. Ataul Masud, Member, Engineering and Commercial of DESA said.

There is no good or bad organization, governance is the key issue in any organization, he added. Citing example of the ongoing activity of DESA, Masud said, "We are now able to pay electricity purchase bill to PDB along with its previous arrears; now we realize the total amount of billing, there is no union office in our 34 divisions and the bad consumers have started to come to our office with the request to help them update their meters that was tampered and, with commitment to pay religiously,” he further said.

The donor-prescribed "unbundling" in the power sector started with the creation of DESA in 1992. DESA, which has 500,000 subscribers, was created under pressure from the development partners such as the World Bank and the Asian Development Bank (ADB) in the early nineties for better electricity supply in Dhaka and its adjoining areas. But it has failed to meet its objectives due to massive pilferage and recorded systems loss of an average 29 percent last year.

DESA owes PDB about Tk 4,000 crore. DESA's arrear bills amount to Tk 1300 crore. On the other hand, the systems loss of DESA is officially calculated at 24 percent but unofficially it is close to 48 percent.

* Power Agencies Asked to Start Talks for Captive Electricity
The Power Division has given directives to power agencies to start negotiations for purchase of some 35 megawatts of electricity from captive plants of seven private industries.

Sources in the division said they had come to know that 35MW power could be available by June after primary negotiations with the industries. They said an official order to start negotiations with the industries was issued last week in line with the captive power policy approved by the council of advisers.

An official said: The power agencies are likely to purchase captive power from these industries for six months as an emergency measure to tackle electricity shortage.

The Power Development Board was given directive to start negotiation for purchase of 5 MW power from PHP Group in Chittagong. The electricity will be available by June. On the other hand, the Rural Electrification Board was asked to start negotiation to purchase 2.5 MW electricity from Shung Sing Power Limited at Kaliganj in Gazipur. The electricity will be available by April.

Other negotiations are likely to be held with Emirates Power at Muktarpur in Munshiganj for 3MW power, Unique Power at Sonargaon in Nayaranganj for 13MW, AM Energy at Sonargaon in Narayanganj for 3MW, AA power at Konabari in Gazipur for 5.5MW and Aramit in Chittagong for 1MW.

Emirates’ 1 MW power will be available in a month, AM Energy’s 3MW is available at present, AA Power’s 1.5MW is also available now and 4MW will be available soon and Unique’s 13MW may be obtained by June.

Sources said that most of these industries had surplus electricity as they were yet to go into full production. “We have decided to purchase power for six months as many of them will not be able to sell electricity after that when they would go into full production,” said a source.

The price of the electricity will be fixed based on the location of the plant. However, the price will not exceed Tk 2.12 per unit.

“Although the amount of power likely to be purchased from captive plants is not very significant, it will ease power crisis in the respective areas,” said an official.

The country is now facing around 800MW power shortage as the current generation is around 3400-3500MW against the demand for 4200MW. The shortage is likely to reach 1500MW in peak summer because of increase in demand.

Tata Hints at Withdrawing from Bangladesh

Peeved at the delay in getting the approval of Bangladesh government, Indian Tata Group has hinted it may shelve plans to invest over three billion dollars to set up power, steel and fertilizer projects in the country.

"While we may be interested in investments in Bangladesh, the more time it takes to come to an agreement or more delays happen, the more difficult it will be for us to invest in the country," Tata Group's Chief of Bangladesh operations Indranil Sengupta said.

"Any organization has limited financial and human resources," he said, and warned the group was constantly looking for opportunities across the globe.

"As and when we keep committing to our resources to such opportunities, the resources become more limited," he said, citing the example of Tata takeover of Anglo-Dutch steel company Corus Group Plc in a 12 billion dollar deal.

"For example, we did Corus and there are other opportunities in the pipeline and the more we commit before the agreement with Bangladesh happens, the more difficult it becomes for us to invest," Sengupta said.

Tata, India's largest corporate house, had planned to invest more than three billion dollars for setting up power, steel and fertilizer plants, but the Bangladesh government has so far not given its approval.

Poultry Wastes can Generate 6MW Electricity

As much as six megawatt electricity can be generated from poultry excrement at Gazipur poultry zone, also known as the 'Poultry capital', experts said at a seminar in Gazipur.

Around 2.7 crore poultry birds are being raised in Gazipur that excrete around 1350 metric tons of wastes everyday, well enough to generate six megawatt electricity.

The seminar titled 'Poultry waste: Environment-friendly renewable energy' was held at Rajanigandha Rest House located at Bhawal National Park.

The Centre for Environmental Studies (CIS) and State University of Bangladesh jointly organized the seminar.

A total of 90 people, including 40 poultry farm owners and government and non-government officials, participated in the seminar while four papers were presented. Prof MS Islam of environmental science department of State University took part in the discussion on the papers. A few affected people depicted the plights caused by excessive poultry excrement. Vice Chancellor of State University Prof M S Elias Dhami presided over the seminar.

PDB to Pay VAT for Barapukuria Coal

The Power and Energy Ministry rejected the request of cash-strapped Power Development Board for exemption from paying VAT to the government for the Barapukuria coal.

PDB officials made the request at a meeting as it had been decided that PDB would pay VAT as per the rules, but not Barapukuria Coal Mining Company Limited which is a Petrobangla subsidiary.

Energy Advisor Tapan Chowdhury chaired the meeting.

Although PDB has been purchasing coal from Barapukuria since 2005 for operating 2X125MW Barapukuria Power Plant, no VAT had been paid to the National Board of Revenue against the coal regarding a dispute over paying VAT.

Petrobangla officials at the meeting said as per the government rules, the buyer, in this case PDB, should pay VAT.

Tapan Chowdhury said that PDB would pay VAT and it would not be possible for the NBR to exempt VAT for the coal as the government’s exchequer had already been stressed because of overpriced coal mining project.

Moreover, VAT had been fixed considering the base price of one ton of coal only at $10, although the actual coal price for PDB had been fixed at $60 per ton.

“So they [PDB] should not face any problem for paying $1.5 VAT for per ton of coal,” the Advisor said. The power plant consumes around 1000-1200 tons of coal a day, if one of 125MW units remains in operation.

The meeting decided that the BCMCL would pay the income tax.

PDB officials said that VAT would be an additional burden on the cash strapped PDB that incurs a loss of around Tk 500 crore by selling electricity at a subsidized rate. “However, we have to pay VAT as per the rule,” said an official.

Tengratilla Dispute to be Resolved Thru' Local Arbitration

The dispute between the Energy and Mineral Resources Division (EMRD) and Niko Resources over the compensation of Tengratila gas field blowout at Chhatak in Sunamgang is set to be resolved soon through local arbitration.

Both the parties have already agreed in principle for settling the dispute through local arbitrators, said a senior official at Energy and Mineral Resources Division. He said the EMRD and the Niko would initiate the process of settling the dispute formally after assigning their individual arbitrators.

"We have discussed the issue with the government and are ready to accept the concept of appointing arbitrator to settle the issue," said Niko Resources Limited Vice President Brian J Adolph.

Commenting on the latest move, Brian, who is also Country Manager of Niko in Bangladesh, hoped that the arbitration would be balanced and fair to both the parties.

PDB to Help Farmers Run Irrigation Pumps
The Power Development Board (PDB) has initiated a move to help the farmers of the northern region run their irrigation pumps smoothly by resolving the low voltage problem.

The board has installed four capacitor banks, each having 5.0 mega var (MV), at Katakhali in the Rajshahi region to stabilize the power supply situation. The capacitor banks will help save 4.0 megawatt power and solve low voltage problem in the region.

PDB Chairman MD Khijir Khan inaugurated the operation of those capacitor banks recently. He asked the authorities concerned to strengthen the drive against the illegal power users.