Govt may scrap deal with Italian company

The government is now considering scrapping a deal on the solid waste-based 100 megawatt (MW) electricity generation project with its Italian implementing agency, as it has made 'no progress' even 14 months after signing the deal, officials say.

After failing to meet the deadline twice, the Italian company -- Management Environment Finance SRL Ltd (MEF) -- recently sent a letter to the Local Government Division (LGD), seeking another spell of time extension.

The government signed the deal with the company in February last year to set up two separate waste-based power plants for generating 100 MW of electricity.

The power plants were supposed to be built at the capital's two solid waste dumping grounds -- Matuail and Amin Bazar.

The Ministry of Local Government and Rural Development (LGRD) is now chalking out ways to scrap the deal with the MEF, a senior official has said.

He said the officials concerned sat in a meeting at the ministry last month and discussed the issue, following the company's letter for further time extension.

"Everybody in the meeting expressed their deep concern, as the company made no mentionable progress even 14 months after signing the agreement."

The ministry is now considering scrapping the deal, as the MEF has already violated some conditions of the agreement. As per the deal, the plants were supposed to start supplying power to the national grid after 36 months from the date of signing.

Assistant engineer of Dhaka South City Corporation's (DSCC) Waste Management Unit Abdullah Harun said the plants were scheduled to start generating 20 per cent of the total electricity within 18 months and 50 per cent after 24 months.

 Dhaka Electric Supply Company Limited (DESCO), Dhaka Power Distribution Company Limited (DPDC) and Rural Electrification Board (REB) would purchase power from the company at Tk 8.75 per unit (kilowatt-hour) for the next 20 years.

Under the deal, the Italian company was supposed to invest $ 300 million for construction of the two power plants, each having 50 MW capacity. The project would create employment for at least 2,000 people.

"But, unfortunately the Italian company hasn't made any visible progress over the last 14 months," Mr Harun said.

The two city corporations took all possible steps to provide required land and solid waste to the firm as per the deal, he further said.

When contacted, superintendent engineer of Dhaka North City Corporation (DNCC) Mesbahul Karim said they selected 20 acres of land for constructing a solid waste-based power station on the 50-acre Amin Bazar dumping ground.

 "But MEF is yet to communicate with us regarding construction of the plant. We've come to know that it hasn't managed any fund so far."

However, comments of the Italian company's local partner -- Creed Bangladesh Limited -- were not available in this connection even after repeated efforts.

Both DSCC and DNCC everyday dispose of around 2,800 to 3,000 tonnes of solid waste on an average in the peak season, from January to June.