Power tariff to rise in next 3 years : Muhith

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FE Report
Finance Minister AMA Muhith Sunday disclosed a government plan to raise electricity tariff in next three years to cut subsidy to state-run power entities.
"Power tariff will be increased in the next three years. Raising electricity tariff is an easy option to contain inflation instead of borrowing and foreign aid," Mr Muhith said at a press briefing at Biduyt Bhaban in the city.
Prime Minister's Adviser on Energy Dr Tawfiq-e-Elhai Chowdhury, however, opposed the plan after Muhith's departure from the programme venue.
"I disagree with the finance minister. Please take his statement as a futuristic prediction," Mr Chowdhury said without elaborating.
The Power Division of the Ministry of Power and Energy organised the programme to give a briefing on the country's power sector scenario marking three years of the government. It also inked separate memorandum of understanding (MoU) with nine state-run power entities to upgrade their efficiency during the function.
The finance minister revealed the government plan over future electricity tariff structure following criticism from different quarters over the recent hikes in prices of petroleum and electricity.
The government raised prices of diesel, kerosene, petrol, octane and furnace oil by Tk 5.0 per litre Friday last.
Retail power tariff will soar further by up to 7.76 per cent from February 1, 2012 --- on top of the 15.02 per cent raised in December last year.
Planning Minister AK Khandker, Information Minister Abul Kalam Azad, State Minister for Power and Energy Muhammad Enamul Huq, Power Secretary Abul Kalam Azad and BPDB Chairman ASM Alamgir Kabir also spoke at the function.
"The government had no option but to install quick rental power plants (QRPP) to ease the country's electricity crisis," Mr Muhith said backing the power ministry's stance over reducing electricity crisis by installing QRPPs
under short-term measures.
He said the government could keep the people in darkness, by putting the electricity generation plans under short-term measures on hold.
"But we preferred generating electricity for betterment of the country," he said.
Besides, the number of QRPPs is only about half of the total new power plants, the minister said.
The finance minister also said the government has, for the first time, initiated a move to stop operating the age-old power plants in phases.
"Age-old power plants having the installed capacity of 2,000 megawatts (mw) will stop functioning by next three years," Mr Muhith said.
The government has also moved to import around 500mw of electricity from India to meet the mounting demand for it. Plans are also there to import electricity from Nepal and Bhutan through equity investment, he said.
The finance minister also pointed out that the country needs to provide transit facility to neighbouring countries to continue its economic growth.
"We want to be a transit-country and become a business hub," Muhith said.
Speaking on the occasion, Tawfiq-e-Elahi Chowdhury also said that despite the recent hike in electricity tariff, the rate is lower than that in the neighbouring countries.
Information Minister Abul Kalam Azad stressed constructive criticism by the media of the government's activities and its reform programmes.
"There might have some faults in discharging duties. We should consider it," he said.
"We have resource constraints too," Mr Azad said.
The planning minister said that the country's future prospect was really bright.
"We may have to bear sufferings temporarily for the next 2-3 years," he said.
The country had already achieved self-sufficiency in food production and was expecting to come out of poverty level by 2030 next, he said.
"The performance of RMG (ready-made garment), leather, medicine and ship manufacturing sectors is tremendous," he said.
"Where the prices of petroleum products are cheaper than ours?" He posed the question shrugging off criticism of the latest fuel price hike.
The government has added 2,894mw of new electricity generation since taking office in January 2009, the BPDB Chairman said in a presentation.
It has already inked 47 deals to build 49 power plants to generate 5,319mw of electricity in total, of which 1,944mw already came online, he said.
Twenty-five more power plant projects are under construction to generate 3,375mw of electricity.
The government has also a plan to sign deals for 33 new power plant projects within next six months to generate 5,857mw of electricity, said the BPDB top boss.