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Government’s failure in the
power sector is now the most discussed about matter in the country. But
State Minister for Power Iqbal Hassan Mahmood thinks otherwise. He said that
the present situation is much better compared to the crisis during the past
Awami League government. “We find the truth if we compare the ratio of
shortage during the last government and the shortage prevailing now,” he
claimed. He said that the demand-supply ratio was 77.68 in 1998 while it was
84.77 in 2005.
He came up with the data and observation in an interview with Energy & Power
Editor Mollah Amzad Hossain. Following are the excerpts:
EP: Your government has totally failed to increase generation in last
four years. How do you look at the failure?
Mahmood: This allegation is not true. The net power generation was
2,904 MW when we took over, while the present generation is 3,652 MW. We
have been able to raise power generation by 950 MW through proper
maintenance in last one year. The blanket allegation that the government has
failed to raise generation is not true.
EP: There is an allegation that you failed to carry out the right
thing in right time; now you are going to strike “anti-state” deals in the
name of facing the emergency.
Mahmood: This allegation is also not true. An emergency planning is
likely to be required for the problem-ridden sector. We are doing that.
There is no scope to smell rat into it.
EP: According to the government statistics the net generation in 1996
was 1,972 MW. It stood at 2,904 MW in 2001. It means that the generation
during the Awami League government had increased by 932 MW. And from 2001 to
2004 your net generation raise was 748 MW. There is no chance that any new
plant will come into operation during your tenure. How will you look into
the failure?
Mahmood: It’s true that we could not complete some of initiatives we
had launched. For example, for the first time we had initiated to set up a
power plant under the public-private partnership. But, you know that you
have to face tremendous obstruction if you go for anything new in this
country. Same thing happened here, but works are on. We are expecting that
we will be able to select the entrepreneur for the Sirajganj 450 MW plant.
The work order for Meghnaghat second phase in the private sector is now in
the final stage. The Fenchuganj 90 MW is also now in the final stage.
Besides, some more projects are in pipeline.
Already we have brought the first coal-fired power plant into generation.
The Tongi 100 MW plant started generation. Two more plants -- Siddhirganj
210 MW and Meghnaghat 450 MW -- started generation during our tenure.
We had planned to go for massive generation. May be we have not been
succeeded to reach that level, but it’s not true that we couldn’t increase
the generation.
EP: After first two years of Awami League government the power
shortage was not massive. The Awami League government had to face the huge
power crisis due to failure of the past BNP government (1991-96) in
increasing the generation. The BNP government once again failed to raise the
generation and the next government -- no matter whether BNP or Awami League
will have to face a serious crisis situation. Why BNP government every time
fails in the power sector?
Mahmood: This allegation is also not true at all. The Awami League
sacrificing the interest of the country as well as the PDB had gone for IPPs.
Now we are facing the consequences. The Awami League government did not
follow up the projects in the pipeline left by the past BNP government
(1991-96). Siddhirganj 210 MW is the example. We had the complete the work
we had initiated in our previous period. I don’t think there is any logic
for the allegation that BNP fails in the power sector.
EP: But you didn’t face any major problem in the power sector in
first two years due to the IPPs done by the Awami League government. It is
said that there would have been no power crisis had the projects initiated
by the Awami League government been implemented properly by your government.
Mahmood: Not true. We could ensure proper power supply in last three
years due to proper planning and their successful implementation. And apart
from 210 MW plant in Khulna, the Awami League government did not keep any
project in the pipeline. And their (AL’s) Finance Minister had objection
about the Khulna project. Due to this complexity the project could not be
implemented.
Rather, credit goes to us for successful implementation of many projects,
including Barapukuria, and the projects in the final stage.
EP: You claim that you introduced a new era in the power sector that
even your predecessors even couldn’t imagine. What’s the reality?
Mahmood: We had started with the challenge of ensuring financial discipline
in the entire power sector and we are 100 percent successful. You’ve to
remember that there will be no fruit if we can raise generation but couldn’t
earn revenue by selling electricity. A sector can’t survive without profit.
So, my first challenge was commercially restructuring the sector.
That’s why I gave highest priority to the distribution sector. The result is
that supply of electricity and realization of revenue both marked rise. Take
the example of DESCO where rate of realization is now 95 percent and arrears
are only for two months. The situation didn’t improve remarkably, but many
positive changes took place. We have been succeeded to bring down the system
loss to 22.06 percent, which was 31.20 percent in 1996.
Everyone must know that the sector will not survive if the generation cost
is higher than the selling price of electricity. Again, our people can’t
purchase electricity at a high cost, but we need huge investment in the
sector. We’ve to invest 16 billion US dollars for ensuring electricity for
all by 2020. No government can make such a huge investment. The requirement
is to mobilize the fund from the capital market. If it can be done we can
have low-cost fund from the donors and banks.
Considering all these phenomena, we have been able to prepare the power
sector for a bright future. No government in the past thought in this way.
Yes, we introduced a new era in the power sector.
EP: And with this view did you decided to release 25 percent shares
of two companies in the capital market?
Mahmood: From the very beginning we have been working keeping this
day in our mind. The primary result of our plan is the decision of releasing
25 percent shares of both Power Grid Company of Bangladesh (PGCB) and Dhaka
Electric Supply Company Limited (DESCO) in the capital market. I think it’s
a good start. I believe it will play an important role for mobilizing funds
from the capital market for the energy sector companies in future.
EP: The two companies have been asked to get approval from the SEC
for direct listing with stock exchanges. Is it possible within this period?
Mahmood: The date has been fixed in consultation with all concerned
organizations of the capital market. Investment Corporation of Bangladesh (ICB)
will act as issue manager of the two companies. The companies will not issue
direct IPOs. The shares will be floated through direct listing with Dhaka
Stock Exchange and Chittagong Stock Exchange.
EP: What positive changes you are expecting through this?
Mahmood: The shareholders will be able give their opinions in the
annual general meetings. I think it will ensure accountability and service
of the companies. It will bring more skills. Now the 100 percent shares of
the companies are held by the government. When the companies will go to
public, the shareholders will act as pressure groups.
EP: What’s your future plan for mobilizing funds from capital market
and low-cost fund from donors? Why PDB will not be made a holding company
under this process?
Mahmood: Works are on for making the PDB a holding company. In fact
holding company is a company that holds shares of many companies. Its work
is formulating policies, developing management model and analyzing financial
flows. Already there are several companies under the PDB. I believe under
the new chapter in the sector the shares of the PDB companies could be
offloaded.
Once we are able to mobilize capital from the market the international
financial organizations and banks will be interested to provide money with
less interest.
EP: We have been hearing about load management for last one decade.
Are you really serious about load management or it’s a stunt?
Mahmood: Why it’ll be a stunt? But it can’t be implemented through
pressure. We’ll have to implement it by creating awareness. Under this, we
had requested the shopping malls to keep shops closed in the peak hours, but
they countered by threatening and demanded adequate power supply.
However, load management is not possible only by keeping the shopping malls
closed. The government has to initiate massive program for efficient use of
electricity. Indonesia has been saving huge electricity by using energy
saving bulbs, but we are not going for it.
The government should go for a massive project for efficient use of
electricity. We can save huge electricity by using only energy saving bulbs.
EP: Will the present power crisis be continuing?
Mahmood: There is no country in the SAARC region where there is no
electricity crisis. The crisis is more in the capitals of the SAARC
countries. Dhaka is not an exception.
EP: So the crisis will be persisting?
Mahmood: Obviously not. We introduced a new era in the power sector
to bring the crisis to an end.
EP: There is allegation that you failed in this sector.
Mahmood: The allegation is political. I couldn’t achieve the target I
had dreamt of. But I have been able to give a strong foundation of the power
sector. It will help progressing in future and meet the peoples’ demand.
However, in between the dream and reality there is the bureaucracy. We
politicians are helping keep the red tapism alive.
EP: What’s your suggestion for a perfect power sector?
Mahmood: No target could be attained if the power sector is not given
full independence in adopting projects and their implementation.
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