The government is set to allow the installation of around a dozen privately-owned new and 'expensive' oil-fired power plants without tender, a move termed 'illogical' and 'questionable' by energy experts.
Besides, the Power Division under the Ministry of Power, Energy and Mineral Resources is out to extend tenure of several more existing privately-owned oil-fired rental and quick rental power plants in accordance with the provisions of the special law, titled, the Speedy Supply of Power and Energy (Special Provision) Act.
However, where the experts have suggested the government take decisions on case to case basis instead of making wholesale decision.
A couple of unsolicited proposals to build liquefied natural gas (LNG) based power plants are also pending with the government, officials said.
The documents of most of these power plant projects have been prepared hastily and got nod from the state-owned Bangladesh Power Development Board (BPDB) without much scrutiny, it has been alleged.
Of the pending proposals three private companies -- Summit Power Limited, United Power Generation and Distribution Co. Ltd and a joint-venture consortium of Bangla Trac Communication and Acorn Infrastructure Services Ltd -- alone have proposed to set up five power projects to generate a total of 2300 megawatts (MW) of oil-fired and LNG -based power plants, a senior Power Division official said.
Summit is interested to build a 500-MW furnace oil- fired power plant and a 700-MW LNG-based plants, United proposes to set up a 500-MW furnace oil- fired and a 500-MW LNG-based plants and the joint venture of Bangla Trac Communication and Acorn Infrastructure Services Ltd is interested to build a 100-MW furnace oil- fired power plant.
The official said the government has moved to accept the unsolicited proposals from the private sector under the Speedy Supply of Power and Energy (Special Provision) (Amendment) Act which is expected to be extended for four more years.
The BPDB would have to purchase electricity from these oil-fired power plants at around Tk 16 per unit (1 kilo-watt hour), almost three fold of the country's average electricity generation cost, he added.
If awarded, these power plants would be in the front among the projects to be awarded under the special law after its extension, he added.
The government earlier awarded around a dozen oil-fired rental and quick rental power plants to private sector without any tender.
Most of them failed to initiate electricity generation within their stipulated time-frame and many of them installed old and inefficient generators and boilers due to lack of government monitoring, it has been alleged.
Country's average electricity generation costs skyrocketed resulting in almost three-fold increase of electricity tariff for the clients, they added.
The government also has been counting billions of taka as subsidy.
"I don't see any reason of awarding more oil-fired power plants without tender right now," Professor Ijaz Hossain of Bangladesh University of Engineering and Technology (BUET) told the FE Saturday.
He said tendering process takes only around six months and it is not so complicated for accepting project proposals through bidding, he said.
"Currently there is not that much crisis of electricity and the temperature in the coming months would fall with the onset of winter," he said.
The government might face the question of transparency if it continues awarding such plants without tender, he warned.
The government could rather come up and build new oil-fired power plants of its own, if it is urgent, he suggested.
Regarding extension of the oil-fired power plants, Professor Hossain said that the government should scrutinize the extension proposal according to their merits.
The sponsors who are interested to lower the tariff rates could get extension, he added.
It is unfortunate that the government is yet to come up with much concentration to rehabilitate the old power plants, he lamented.
Former Director General of Power Cell BD Rahmatullah said the new oil-fired power plants would be 'big burden' for the government and the public.
It would lead to further delay in implementation of the much needed base-load and efficient power plants, he added.
The sponsors of base load and low-cost big power plants, who are also the sponsors of many rental and quick rental oil-fired power plants, are now concentrating on their oil-fired power plants to earn a quick money, he justified.
It would increase further the electricity generation costs, he added.
Almost three-fold hike in electricity tariffs over the past four years has pushed the country's average electricity tariff higher than that of India, Nepal and Bhutan among South Asian countries, a recent World Bank (WB) report has revealed.
The country's average electricity tariff is now US Cents 7.70 (Tk 6.15) per unit (1 kilowatt-hour), which is US Cents 7.03 in India, US Cents 7.63 in Nepal and US Cents 3.21 in Bhutan, the WB report stated.
Installation of oil-fired rental and quick rental power plants over the past several years has pushed up the country's average electricity generation cost to Tk 6.7 per unit during the previous fiscal year (FY) 2013 from Tk 2.62 per unit of the FY 2011, it added.
© 2026 - All Rights with The Financial Express
