More unsolicited power plants likely ahead of next polls [ Tritiyo Matra News ]

More unsolicited power plants likely ahead of next polls

Local June 11, 2017

The government is weighing options to award a number of power plants with 100-300 megawatts capacity each bypassing tenders ahead of the next parliamentary polls scheduled to be held between October 2018 and January 2019.
The power division and the state-run Power Development Board are now examining proposals for installing 15 fuel oil-fired power plants with a combined capacity of 1,700MW in 12 different locations, said officials.
The available power generation capacity is not adequate to meet the current summer demand while the shortage of power supply would be acute in the coming years, power division secretary Ahmad Kaikaus told New Age on Thursday.
‘We are examining some options like extension of existing short-term power purchase contracts, expanding capacities of existing power plants and awarding fresh contracts without bidding to increase power generation capacities in the shortest possible time,’ he said.
The government would soon take a decision in this regard, the power division secretary said.
He, however, denied of having any connection between the government’s moves and the upcoming general election and said, ‘It is my responsibility to ensure adequate supply of electricity regardless of any upcoming election or any other situation.’
While delivering the budget speech on June 1, finance minister AMA Muhith, however, announced that the government from next year would begin phasing out expensive rental power plants, most of which were awarded bypassing tenders and have already contributed towards raising power tariff by more than 69 per cent since 2010.
The contracts would be awarded under the Speedy Supply of Power and Energy (Special Provisions) Act 2010 that indemnified officials concerned against prosecution for awarding contracts without tender, they said, adding that the government was yet to decide whether the contracts would be rent-based.
When asked about the use of controversial speedy supply act, Kaikaus said that it was not a problem if the power purchase contracts were awarded at competitive rates.
Installation of seven barge-mounted power plants are now under the government’s consideration, of which two each are proposed to be installed in Cox’s Bazar and Mymensingh and the other three would be installed in Chandpur, Noapara and Bagerhat, according to a summary prepared by the power division for examining the potentials.
The government is also considering eight proposals for land-based power plants, of which two with 100MW capacity each are proposed to be installed at Bhaluka, Mymensingh and a 300MW would be installed at Mirsarai, Chittagong while five other plants would be installed in Magura, Jessore, Lalmonirhat, at Niamatpur in Naogaon and Jaipurhat.
The government is taking the moves after the power board had paid 20 rental power plants with 1,653MW capacity Tk 6,000 crore extra in capacity charge during
their original contract period that exhausted between 2013 and 2015, said officials.
In the face of delays in implementing the mid-term plan, the government extended the power purchase contracts with 15 out of the 20 rental power plants who would accumulate about Tk 2,000 crore extra in capacity charge during the extended contract period to be exhausted between 2018 and 2020, they said.
Now the government plans to extend a good number of contracts to the 15 and award some fresh contracts which would raise the cost of power generation further, the officials said.
Meanwhile, the government awarded six contracts through bidding to install six furnace oil-fired power plants with more than 600MW capacity,
which is expected to come into operation in the next one year.
The government has been realising the extra money charged by rental power suppliers from consumers by increasing electricity prices in phases since 2010, said Consumers’ Association of Bangladesh energy adviser M Shamsul Alam, also an electrical engineer.
He alleged that the government — aimed at increasing its revenue earning through taxes as the more the power prices the higher the taxes — was favouring a quarter of private companies to make money out of power business.
Shamsul said that the government’s plan was ‘pro-business’, not ‘pro-consumers’.
Citing the grounds of increasing power generation costs caused by expensive short-term measures, the Bangladesh Energy Regulatory Commission increased the electricity prices by 69.25 per cent — up from Tk 3.76 per unit to Tk 6.33 — in eight phases between March 2010 and September 2015.
Another move for raising prices of electricity is now under the commission’s consideration.