Delay in implementation pushes cost of power projects up

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FE Report
The number of incomplete power sector projects have risen over the years due to inefficiency of the implementing agencies and political interference.
But the delay has pushed up the cost of these power projects to a large extent.
According to sources, a total of 51 projects taken up for implementation under the current Annual Development Programme (ADP). Their implementation would cost Tk 142.19 billion in addition to Tk 37.35 billion allocated in the ADP for the current fiscal.
An official of the Power Division preferring anonymity told the FE that some projects were taken up five to eight years back but their actual implementation has not yet started.
"When the country has been experiencing severe power shortage, the implementing agencies are failing to implement the projects in time," he said.
When asked about the reasons for non-implementation of the projects in time, the Power Division official said: "In spite of availability of fund and commencement of ground works by the executing agencies, interference by political leaders and bureaucrats in the past, impeded timely implementation."
Citing an example, the official said, of the Chandpur 150MW combined cycle power plant, the project was undertaken in fiscal 2001-02 and a Chinese company, Harbin, won the contract.
"But due to interference of some political leaders and bureaucrats, the work order to the Chinese contractor was delayed and the project cost escalated due to depreciation of local currency against US dollar and increase in the cost of the machinery and equipment. As a result, the contractor shied away and the government will have to invite tender again for the project. But in the meantime some Tk 79.6 million has been spent from the ADP budget for the purpose," he said.
A Planning Commission (PC) official said: "The commission had approved project proposals of some of the power projects five to eight years ago, but the executing agencies have failed to start the work. The commission approved the revised proposals of those projects two to three years back due to enhanced project costs, but the agencies concerned have so far failed to start the implementation process."
According to PC sources, projects including 1800-kilowatt (Kw) capacity wind power plant project was undertaken in financial year (FY) 2000-01, the Chandpur 150MW power project in FY2002, the Sylhet 150MW power plant in FY2002 and rehabilitation of unit-3 of Karnaphuli Hydropower in FY1999 by the Power Development Board (PDB), but they have either failed to complete the projects fully or start the implementation work so far.
Out of the 51 power projects in the current ADP, 46 projects will be completed by next fiscal 2008-09, which will require Tk 112.26 billion in addition to the allocation of Tk 37.35 billion made in the current ADP, the sources said.
In addition, the Power Division has taken up for implementation of some new generation, transmission and distribution projects between 2007 and 2012. But implementation would require further allocation.
According to the PC, out of the 51 projects in the pipeline, 15 generation projects will require Tk 75.53 billion, nine transmission projects Tk 24.78 billion and 27 distribution projects Tk 62.13 billion.