Quick rental plants eat up lion’s share

Quick rental power plants last July ate up more than 80 per cent of the subsidy for the power sector although they provided less than 10 percent electricity to the national grid, officials said.

The state-owned Power Development Board estimated that it incurred a loss of Tk 596.34 crore during November-December 2011 for buying electricity from the costly rental power plants.

The amount of loss jumped to Tk 534.36 crore in last July alone as the government’s dependence on the rental plants increased further because of its failure to make significant progress in installation of big power plants.

At present, PDB is purchasing power from 17 small power plants, mainly run on diesel, at the rate ranging between Tk 17 and Tk 22 per unit.

PDB’s daily generation data showed fuel-based power plants, mostly run by private owners, are providing less than 10 percent of maximum 5,000 megawatt electricity supplied to the national grid.

Transparency International Bangladesh executive director Iftekharuzzaman said questions have already been raised whether the government analysed cost-benefit ratio of purchasing such electricity.

‘The power purchased from the quick rental plants is not cost effective,’ he told New Age. ‘They have already put additional burden on the public coffer,’ he said.
In the last fiscal year, PBD incurred losses of Tk 4,187.78 crore for purchasing power from Independent Power Producers, the rental power plants and quick rental power plants.

The government made up the losses incurred by PDB through providing huge subsidy.

Finance ministry officials said the huge amount of subsidy could not prevent the government from increasing power price a number of times in the last six months.
The government has already announced that it would raise power price again from the current month to make up the losses incurred on account of electricity purchase from the quick rental plants.

Economist Anu Mohammad said price hike of electricity time and again is not acceptable when the government is giving huge subsidy from the public coffer.
‘Influential figures of the ruling party who set up the plants are mostly benefited from the price hike of electricity and subsidy,’ he said.

Anu Muhammad, also a leader of the national committee to protect the country’s natural resources like oil, gas and coal, alleged that massive corruption was taking place in purchasing power from the quick rental power plants.

Many point out that the ruling party’s failure to make progress with the public-funded big power plants was highly suspicious. They alleged that the ruling party was giving less priority to install big power plants to continue purchase of electricity from the quick rental plants.

The country’s South Asian neighbour Pakistan pursued a policy of generating electricity by the quick rental power plants. Pakistan Supreme Court in March ordered scraping the deals on quick rental power plants in view of massive corruption.

News Source: 
The New Age