Ensuring early installation of rental power plants
Sunday, 30 December 2007
THE collapse of the national power grid on a couple of occasions since November 15 last has again brought to the fore the poor state of affairs with the country's power sector. Inadequate maintenance of the old and dilapidated power generation units and poor coordination were identified as primary reasons for the national grid failures by a probe committee formed by the government. But all the power-related problems do originate from one particular source-insufficient power generation. There has been serious mismatch between demand for and, supply of, power. The gap between the two is widening with every passing day. The failure of the immediate past government to add even a single megawatt of power to the national grid during its five-year tenure had made the power situation worse.
The interim administration since its coming to power in January last has been trying to improve the power situation. Side by side with its efforts to install big power stations, it has embarked upon schemes to buy electricity from private power plants to help reduce the large gap between demand and supply. The power ministry has opened negotiations with the multilateral lenders with the objective of securing necessary financing for big power plants the implementation of which takes, at least, three to four years. The lenders, particularly the Asian Development Bank (ADB), has agreed to provide fund for the implementation of a few power plants. Meanwhile, the power division has selected separate locations for the installation of eight rental power plants by the local private entrepreneurs with the objective of getting nearly 600 megawatt of electricity by the end of the next calendar year. Official approval has already been given for the installation of four such plants.
But the problem - mismatch between the cost of procurement of electricity from the independent power producers (IPPs) and the selling price of the same - emerged again as a sore point at the time striking deal with the private sector rental power plants. The loss on account of the difference between the two has made the Power Development Board (PDB) almost bankrupt. To avoid such a situation, the private sector entrepreneurs concerned wanted the government to reduce duty and taxes levied on the import of machinery and equipment of power plants, enabling them to offer power at lower rates to the government. The power ministry, rightly, decided to entertain the request from the entrepreneurs and took up the issue with the National Board of Revenue (NBR). The NBR people, realising the gravity of power problem, has decided to provide tax relief to the rental power plant and a statutory regulatory order (SRO) to this effect is expected to be issued within a few days.
There is no denying that electricity to be procured from the rental power plants would be too meagre to meet the huge power deficit, which, at times, soars to 1500 mw. However, if the power division can manage 600 mw from rental power plants by the end of next year, it would be of immense help in feeding, at least partially, the power-hungry mills and factories and commercial establishments across the country. What is needed now is fast execution of the plants. There should be no reason for the private entrepreneurs to delay their projects if they find everything needed to accomplish the task in place, which is highly unusual in case of Bangladesh. The power ministry here will have to extend their helping hand to the owners concerned to get the power plants installed as early as possible.
The interim administration since its coming to power in January last has been trying to improve the power situation. Side by side with its efforts to install big power stations, it has embarked upon schemes to buy electricity from private power plants to help reduce the large gap between demand and supply. The power ministry has opened negotiations with the multilateral lenders with the objective of securing necessary financing for big power plants the implementation of which takes, at least, three to four years. The lenders, particularly the Asian Development Bank (ADB), has agreed to provide fund for the implementation of a few power plants. Meanwhile, the power division has selected separate locations for the installation of eight rental power plants by the local private entrepreneurs with the objective of getting nearly 600 megawatt of electricity by the end of the next calendar year. Official approval has already been given for the installation of four such plants.
But the problem - mismatch between the cost of procurement of electricity from the independent power producers (IPPs) and the selling price of the same - emerged again as a sore point at the time striking deal with the private sector rental power plants. The loss on account of the difference between the two has made the Power Development Board (PDB) almost bankrupt. To avoid such a situation, the private sector entrepreneurs concerned wanted the government to reduce duty and taxes levied on the import of machinery and equipment of power plants, enabling them to offer power at lower rates to the government. The power ministry, rightly, decided to entertain the request from the entrepreneurs and took up the issue with the National Board of Revenue (NBR). The NBR people, realising the gravity of power problem, has decided to provide tax relief to the rental power plant and a statutory regulatory order (SRO) to this effect is expected to be issued within a few days.
There is no denying that electricity to be procured from the rental power plants would be too meagre to meet the huge power deficit, which, at times, soars to 1500 mw. However, if the power division can manage 600 mw from rental power plants by the end of next year, it would be of immense help in feeding, at least partially, the power-hungry mills and factories and commercial establishments across the country. What is needed now is fast execution of the plants. There should be no reason for the private entrepreneurs to delay their projects if they find everything needed to accomplish the task in place, which is highly unusual in case of Bangladesh. The power ministry here will have to extend their helping hand to the owners concerned to get the power plants installed as early as possible.