Country' largest private independent power plant (IPP) situated at Meghnaghat has been laid shut for long while the government is forced to buy quick-rental electricity at much higher rates, officials said.
The government exchequer has to pay a minimum 20 per cent higher subsidy to foot the bill for such costly power purchase, sources at the finance division told the FE Thursday.
The Bangladesh Power Development Board (BPDB) has been purchasing electricity from the quick-rental plants at higher prices to compensate for the production loss of 450 megawatts due to the closure of the Meghnaghat plant owned by a foreign firm.
The Meghnaghat power plant is gas-fired and its electricity rate is much lower. But the big unit remained shut since last April following a major fire incident.
A recent forecast made by the finance division said the subsidy from the BPDB might rise to Tk 85 billion or more, against Tk 70 billion earmarked in the national budget.
The government has earmarked a total of Tk 260.5 billion or 1.9 per cent of the GDP as subsidies for sectors concerned for the entire current fiscal year.
There remains an uncertainty as to when the power plant will resume.
Some sources close to the BPDB said the plant would resume operation after fresh price negotiation with the government.
The BPDB usually purchases power from gas-fired plants at rates between Tk 3.5 and Tk 5.5 per unit.
But the electricity price from the quick rentals goes up sharply--usually ranging between Tk 13 and Tk 20 for diesel-fired plants while Tk 7.0 and Tk 13 for furnace oil-based plants.
The finance division has so far disbursed nearly Tk 20 billion in two instalments.
And the BPDB is channelling lot more money to foot the bills submitted by the owners of quick-rental power plants.
They said the BPDB is now heavily dependent on the quick-rental power to make for the deficit left by the AES Meghnaghat shutdown.
A senior official at the division which hands out cash subsidies said they had talked with the BPDB and they gave an idea on the increased payments to be made in favour of the quick-rental units.
The plant used to generate around 7.0 per cent of the country's average generation of around 6,400 megawatts of power, BPDB sources said.
Sources at the division said the government had hopes that the power prices would be adjusted upward. But it eventually failed.
"The government is not adjusting the power prices considering its adverse impacts on the manufacturing sectors and on people's life," a senior official at the division told the FE Thursday.
He however said the subsidy earmarked for Bangladesh Petroleum Corporation (BPC) might be reduced this fiscal following sharp fall of oils on the international market.
He also said there is hardly possibility of rising subsidies for the other sectors.
According to the statistics, the BPDB is the second-largest subsidised sector after agriculture which gets Tk 90 billion.
Meghnaghat power plant was set up by the American AES Corporation in
2003 under a 22-year build-own-operate (BOO) arrangement.
AES later sold the plant to British Globeleq Ltd, which again sold it over to Pendekar Group of Malaysia.
jasimharoon@yahoo.com
