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Most ‘fast-track’ power projects miss schedule

M Azizur Rahman | May 30, 2018 00:00:00

The government's decision to allow installation of 10 oil-fired power plants under 'fast-track' programme has failed to achieve the desired objectives.

The Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) in August last year approved setting up of five diesel-fired power plants and five furnace-oil fired power plants in the private sector.

The plants having a total generation capacity of 1,768 megawatt (MW) were selected without any bidding.

All the five diesel-fired power plants failed to initiate electricity generation within their stipulated deadline -- February 10, 2018, a senior official of state-run Bangladesh Power Development Board (BPDB) told the FE Tuesday.

Only one furnace oil-fired 300 MW power plant -- owned by Summit Group -- could meet the deadline, May 10, 2018, he said.

As on May 29, 2018 only four 'fast-track' power plants -- three diesel and one furnace oil -- were in operation and their overall generation was hovering around 657 MW.

The electricity generated by these plants was around one-third of the targeted output, according to BPDB statistics.

The diesel-fired power plants are now combinedly producing around 371 MW of electricity, less than half of the targeted 800 MW.

The lone furnace-oil fired power plant of Summit Group is producing around 286 MW of electricity. The BPDB had a target to get 978 MW from all five furnace oil-based plants.

The government had awarded these diesel and furnace oil-fired power plants to private sector on the basis of unsolicited offers under the Speedy Supply of Power and Energy (Special Provision) Act 2010.

The law has a provision for granting immunity to all those involved with the quick-fix remedies.

The government also allowed the private entrepreneurs duty-free import of furnace oil to run their power plants with 9.0 per cent service charge along with recovery of import costs. Besides, there is a provision for capacity payment as incentives, said a senior official of Power Division.

Both the diesel and furnace oil-fired power plants were awarded under the independent power producer (IPP) category.

The BPDB is contractually-bound to purchase electricity from the diesel-fired power plants at rates between Tk 19.66 and Tk 19.99 per kilowatt-hour (1 unit).

The tariff is almost three-fold of the existing average retail level electricity price -- Tk 6.84 per unit.

From the furnace-oil fired power plants, the BPDB is pledge-bound to purchase electricity at the tariff rate between Tk 8.25 and Tk 8.37 per unit.

"We awarded the diesel and furnace oil-fired power plants under fast-track to meet the mounting electricity demand from early summer this year," BPDB chairman Khaled Mahmood told the FE.

But, unfortunately, many of them could not begin their operations timely, he said.

When contacted, energy adviser of the Consumers' Association of Bangladesh (CAB) Prof M Shamsul Alam said, "These power plants were awarded not to generate electricity but to facilitate a few to launder money abroad."

It is unfortunate that the government is putting thrust on generating electricity without considering the costs, he said.

"But it can't be a sustainable policy and it is a wrong one," he said.

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