Rental power plants -- morethan a zero-sum game

---

Shamsul Huq Zahid In Bangla, there is a saying 'garaj baro balai' (necessity knows no law). The ongoing power crisis of unmanageable proportion has again proved it to be right, at least, in the case of the government's hasty actions concerning the liquid fuel-guzzling rental power plants. The move to facilitate early commissioning of a good number of rental and 'quick' rental power plants in the private sector with the objective of meeting a large power deficit has given rise to lots of troubles, financial and otherwise, that the government, possibly, failed to foresee in their true perspective. The power shortage has been taking a heavy toll on the economy. And the short-term and handy means chosen to offset, at least, partially that loss, in turn, are making budgetary management on the part of the government rather difficult. The rental power plants together have already emerged as a serious pain in the government's neck. For running those plants, it is left with no option other than spending a substantial amount from its reserve, which has again come under strain of late because of less-than- expected inflow of foreign assistance and remittance income, on the import of additional quantity of diesel and furnace oil. The foreign exchange expenditure apart, what should worry the government more is the subsidy that it would have to provide on account of the supply of fuel to the rental power plants and the gross mismatch between power procurement and selling tariffs. There are confusions about the subsidy estimates since varying disclosures are made from to time by men in-charge of the ministry and agencies concerned. However, according to the latest estimates, if selling tariffs remains unchanged both in the case of petroleum products and power, the government would have to provide subsidies worth Tk. 230 billion -- Tk. 140 billion on oil marketing by the Bangladesh Petroleum Corporation (BPC) and Tk. 90 billion on power purchase, mainly from rental power plants, by the Power Development Board (PDB) in the current fiscal. If the 'subsidy' estimates are right, the government will be in a real soup in meeting those, particularly when the allocation against all types of subsidies in the national budget for this fiscal is little over Tk. 90 billion. In such a situation, the government will take recourse to what most governments do; it would borrow from banks in excess of the amount projected in the budget, thus, adding more fuel to an already high inflationary pressure (point-to-point inflation, according to the Bangladesh Bureau of Statistics, was 12 per cent in last September). There are also other concerns. A good number of rental power plants, according to a recent report in a Bengali daily, are unlikely to be commissioned on schedule because of the fuel supply-related problems. The failure on the part of the Bangladesh Railway and the Bangladesh Inland Water Transport Authority to develop necessary infrastructures to carry fuel to at least seven rental and quick rental power plants has made the commissioning of these power plants, having 450 megawatt (MW) generation capacity, uncertain. Poor navigability, low clearance of bridges over some rivers and insufficient rail track and tank wagons are responsible for the delay in fuel supply. But the government may have to count a cost if these power plants fail to start producing power according to their pre-set schedules. And the conditions set in power purchase agreements that the PDB signed with rental power plants would come into play. Since the government wanted expeditious execution of rental power plants, it included a provision of imposing fines for delayed implementation of rental power plants. The provision is applicable to both the power plants and the government, depending on the nature of the causes. The pertinent question that one may like to ask: Instead of going for rental power plant what else the government could do to narrow the power deficit within the shortest possible time? There is no denying that rental plants are quick-fixes yet expensive solutions to power problem. But what is the use of opting for a solution that cannot deliver results in time for problems that the decision-makers fail to see beforehand? It is expected that the authorities concerned while allowing installation of a power plant at any specific site would take all relevant issues, including the facility available for transportation of fuel to it, into cognizance. More importantly, no matter what the government is claiming about generation of additional power during its nearly three-year rule, the fact remains that people are still troubled by frequent load-shedding. The government may have added 1000-1200 MW or more to the national grid since its coming to power but, in the real sense, it has been more of a zero-sum game since the total generation by public sector power plants, in the meanwhile, has declined due to gas supply shortage or technical glitches. zahidmar10@gmail.com