The government may make policy changes to put the public and private sectors on equal footing in a booming electricity-generation business.
Striking such parity would need an amendment to the government's power generation policy for the private sector, officials said.
Once that is done, government power companies would have equal facility for implementation of power projects or plants as the private power producers enjoy.
The prime minister directed the authorities to bring equality on this score during her visit to the ministry of power, energy and mineral resources in February last, they said.
A meeting was held according to the PM's direction. Dr Ahmad Kaikaus, Additional Secretary of the power division, presided.
Presently, the state-owned power-generation companies and local and foreign joint-venture firms with state companies do not get any financial and other facilities for implementation of power projects as independent Power Producers (IPP) do.
"For this, an uneven situation has been created in the sector -- and it is one kind of disparity to the public- sector power-generation companies," a high official of the power division said.
The power division is forming new power project/company for implementation of production plan under reform programmes. And some initiatives are being taken for establishing large power plants through the joint venture, he said.
The existing private-sector power-generation policy should be revised to ensure a level playing field for public entities and joint ventures with any public company.
This is an imperative for encouraging more investment in the power sector in future, a competent source said.
"A large volume of investments will flow into the power sector if the move is implemented," he added.
He said the draft amended policy will have to be sent to the Internal Resources Division (IRD), the National Board of Revenue (NBR), Bank and Financial Institutions Division, and commerce and law ministries for taking opinion before sending for cabinet division's approval.
"We discussed in a recent meeting the matter of amending the existing Private Sector Power Generation Policy of Bangladesh 1996 to make a level playing field in ensuring equal government facility between private power-generation companies and public power-generation companies following PM's direction," Ahmad Kaikaus told the FE Thursday.
He wouldn't elaborate on the policy amendment.
The private power companies get exemption from corporate income tax for a period of 15 years under the private-sector power-generation policy.
Under the existing policy, the companies are allowed to import plant and equipment and spares up to a maximum of ten percent (10 per cent) of the original value of total plant and equipment within a period of twelve years of commercial operation without payment of customs duties, VAT and any other surcharges as well as import-permit fees except for indigenously produced equipment manufactured according to international standards.
Besides, repatriation of equities along with dividends is allowed for free.
Exemption from income tax in Bangladesh is accorded to foreign lenders to such companies and the companies are exempted from the requirements of obtaining insurance/reinsurance only from the National Insurance Company, namely Sadharan Bima Corporation (SBC).
The IPPs are enjoying more facilities under the policy.
On April 22, 2015, some 6,811 megawatts of electricity was generated in the existing power plants.
The existing plants (public and private) have 11,000mw generating capacity.
The government has started 54 new power plants in four years since assuming power. A good number of power plants through private and public initiative are being implemented in the country, which will go into production by 2016, according to the power development board.
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