The government is going to inject money further to the Rampal power plant despite failure of the Bangladesh-India joint-venture (JV) company to start installation of the proposed 1,320-megawatt (mw) coal-based plant, officials said Saturday.
Power Division officials said the state-owned Power Development Board (PDB) would develop lands for the second block of the Rampal power plant to set up another 1,320mw capacity plant beside the proposed 1,320mw thermal plant site.
"The PDB has recently sent us a project costing Tk 3.31 billion for developing the lands, construction of the boundary and protection walls beside the first block of the Rampal power plant site," said a senior Power Division official.
Meanwhile, PDB undertook a Tk 550 million project, funded by the government from its own exchequer, to develop the first block of the acquired land for the Rampal thermal power plant last year.
"Although the Bangladesh India Friendship Power Company (BIFPC) Limited has so far failed to start installation of the 1,320mw power plant, the PDB is injecting money from the government exchequer for developing the second block of the Rampal power plant," said the official.
"The company has already been struggling for implementation delay of the planned 1,320mw coal-fired power station," he told the FE requesting anonymity and wondering why the PDB is developing more lands beside the existing site at Rampal.
Meanwhile, the Planning Commission (PC) has recently declined to approve the Tk 145.84 billion coal-fired power plant at Rampal due to complexities over its funding and ownership, officials said.
A few months back, the Power Division sent a proposal for the Tk 145.84 billion (US$ 1.82 billion) project to the PC for getting its approval. The construction of the plant was to begin in the fiscal year (FY) 2009-10 for completion in FY 2019.
The PC has sent back the project proposal seeking clarification on funding arrangement and the status of company ownership.
The PC has informed that since the Rampal 1,320mw plant will be set up by a newly-formed India-Bangladesh joint-venture private limited company, as per the government rules and regulations, the approval of the project is beyond its purview, another Power Division official said.
The National Thermal Power Corporation (NTPC), India and the Bangladesh government-owned PDB formed the joint-venture company BIFPC in January 2012 aiming at installing the coal-fired 2x660mw plant at Rampal.
The Power Division official said the BIFPC has failed to start building the 1,320mw thermal power plant due to fund crisis.
According to the project proposal, the BIFPC would borrow 70 per cent of the total Tk 145.84 billion cost of the project from the Export Credit Agency (ECA). Out of the remaining 30 per cent, the PDB will provide 15 per cent fund as its equity while the Indian company NTPC will provide the rest 15 per cent as its own equity.
"The PDB's Tk 3.31 billion funds for developing the second block of the Rampal power station will not be included in the equity of the PDB," the official said wondering why the government will provide funds for land development for a private limited company.
Meanwhile, Bangladeshi environmental activists and development experts have opposed construction of the Rampal power plant due to possible environmental damage of the world's largest mangrove forest - the Sundarbans.
Environmentalists said as coal-based power plants create serious environmental pollution, no country in the world usually gives permission to set up large coal-based power plants within 20 to 25 km distance of forests, agricultural lands and residential areas.
The distance of the proposed Rampal coal-based power plant from the Sundarbans mangrove forest is just 14 km, which is claimed to be a safe distance.
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