PDB in deep financial crisis

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Doulot Akter Mala
The Power Development Board (PDB), hamstrung by liquidity problem, has been in difficulty to clear gas bills to the Petrobangla, the state-owned gas, oil and mineral corporation.
The PDB, the lone state-owned power distributing entity, owed the Petrobangla in unpaid gas bills worth Tk 4.98 billion over last six months.
The accumulated arrear gas bill was worth Tk 12.0 billion, which the board has been clearing with the fund allocated by the government.
Official sources said the PDB is gradually clearing the outstanding gas bills by paying 10 per cent additional gas bills with the monthly bills.
The government has promised to provide the PDB Tk 500 million a month to salvage the cash-strapped entity.
The board has been selling power, especially to the bulk consumers, at a much lower rate than that of its purchasing price. So it will have to incur huge loss until it readjusts the power tariff, sources said.
The PDB, on an average, purchases power at Tk 2.53 per unit from power plants and sells it at Tk 2.37.
The PDB has liabilities worth Tk 8.22 billion as result of non-payment of bills to the independent power producers (IPP), gas, oil and coal companies.
Of Tk 8.22 billion, the PDB has the highest amount of dues to the gas company followed by coal and IPPs.
The IPPs have arrear worth Tk 1.24 billion with the PDB, oil companies, Tk 300 million and coal companies, Taka 170 million.
On contrary, the power division source said, the PDB is to receive Tk 38.96 billion from its bulk consumers as arrear power bills.
"The PDB has been incurring losses worth about Tk 1.0 billion per month due to selling power at a lower price than that of its purchasing cost," PDB chairman Khijir Khan told the FE Friday.
Underscoring the need for readjustment of power tariff, he said, the PDB has already requested the government to readjust the power tariff to salvage the entity.
The gas and oil sector has been receiving higher government allocation than that of PDB, he said.
"We are trying with all of our efforts to keep financial condition of the board stable," he added.
Until improvement of the country's economic condition and easing of inflationary pressure, it will not be possible for the government to increase power tariff, he pointed out.
The power division officials said the PDB will be able reach a break-even point with power tariff hike by Tk 0.54 per unit.
In fiscal 2006-07, the PDB incurred loss of about Tk 11 billion from power sale.
The Rural Electrification Board (REB), Dhaka Electric Supply Company (Desco) and Dhaka Electric Supply Authority (Desa) are the bulk consumers that buy 80 per cent of power from the PDB.
Of the bulk consumers, the PDB incurs the highest amount of loss for supplying power to the REB.
If the board continued to sell at Tk 1.99 per unit, while buying at Tk 2.48, the loss will stand at Tk 4.71 billion in a year, one PDB expert said.
The country's demand for power is around 5200 megawatt while the PDB could supply around 3800 MW.
Ageing power stations of the board can not produce to its full capacity and frequently trip causing load shedding and suffering of the consumers.