Power consumers are largely relieved of load-shedding in the hot summer days this year. The power situation that has improved steadily over the last five years was simply unbearable until the fiscal year (FY), 2009-10.
But the improvement in power situation has been not without a cost. In fact, the cost appears to be too heavy and unsustainable.
The state-owned Power Development Board (PDB) incurred a financial loss of Tk. 6.36 billion in FY 2009-10 when load-shedding was at its peak.
Next year with the entry of a few rental and quick rental power plants the power situation improved to some extent. But the size of the PDB's loss jumped to Tk45.87 billion.
And the process continued thereafter. The power generation continued to rise, mainly due to the purchase of power from a greater number of privately-owned rental plants. The loss in the outgoing fiscal year (2014-15) is likely to go up to Tk. 100 billion.
The entry of rental power plants was allowed as a stop-gap arrangement with a promise to build large and medium scale power plants in both private and public sectors within the shortest possible time.
But the enactment of a special law to provide immunity to actions relating to the installation of rental power plants and purchase of power from those by the PDB raised both doubt and controversies.
Yet the government ignored all criticism and continued to beef up the country's power generation capacity which is now estimated at 11203 megawatt (MW). The BPDB has taken up a plan to expand the capacity to 2400 MW in next five years' time.
Allegations have it that the government agencies concerned are less interested to beef up power generation capacity through the installation of large and cost-effective power plants since the rental power plants have become very attractive sources of illegal earning. Had the government been serious enough, the installation of one or two large plants within a period of six years would not have been that difficult.
In fact, unscrupulous owners of a number of rental power plants have developed various mechanisms to earn money illegally through the sale of power to PDB and so-called capacity payment (payment made to plants for keeping them idle). However, a section of corrupt officials do get a share of that money.
Allegations of irregularities in the payments made by the PDB against the procurement of fuel oils by the private rental plants have also surfaced. Some owners of rental power plants reportedly take payments in excess of their actual cost of fuel procurements. The PDB allegedly often makes payments without any scrutiny of the fuel bills submitted by the rental plants.
True, discontinuation of rental plants are not possible at the moment for these plants meet around 30 per cent of power requirement. However, going by the developments in the power sector in recent years one has justified reasons to believe that the sector has been kept dependent on the rental power plants deliberately to help a few people to reap undue benefit over a long time.
The current international prices of petroleum products are supposed to help the rental power plants to cut their cost of production and sale of power to the PDB at relatively lower rates. But that has not happened. Rather a proposal to hike the power tariff again is awaiting decision from the Bangladesh Energy Regulatory Commission (BERC). The BERC organised a public hearing on the proposal some months back. Though a final decision on the power tariff hike issue has been kept in abeyance, there could be an announcement to this effect anytime.
The per unit cost of procurement of power from the private rental plants varies between Tk.8.0 and Tk.15. The PDB sells the same at an average cost of Tk. 4.70 to the power distribution companies.
Such a large gap in the cost of procurement and sale price and financial irregularities of all sorts are making the PDB to bleed financially. The size of the PDB's loss in all likelihood would continue to bulge until a few large power plants are pressed into operation.
The government obviously compensates for the losses suffered by the PDB in the form of subsidy which is again taxpayers' money. So, ultimate losers remain to be the people. However, the poor taxpayers could be relieved of this burden had the government been truly attentive to the priority task of building large power plants in the public sector during recent years. The power subscribers are happy that the power crisis has eased, but they do not necessarily like the route chosen to end the crisis.
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