Govt sells electricity 28pc lower than the rate it buys from IPPs
Monday, 22 September 2008
Shakhawat Hossain
The caretaker government is selling electricity to the consumers at a rate 28 per cent lower than its cost for purchasing from independent power producers (IPPs), officials of finance and power ministries said Saturday.
It has been forced to purchase electricity from the IPPs at higher rate due to poor generation by state-run power producers under the Bangladesh Power Development Board (BPDB).
The cost for purchasing power from the IPPs ranges between Tk 1.30 and Tk 7.0 per unit.
The officials said the government policy of subsidising electricity for general consumers is the reason behind the wide gap between buy and sale prices.
The BPDB losses were worth Tk 1.27 billion in July-August period of the current fiscal year for purchasing power from the existing six IPPs, said a finance ministry official quoting a review meeting.
The review meeting by the finance ministry was held early this month to take stock of the country's power situation and losses by the BPDB.
"The purchase cost of electricity from the IPPs was Tk 4.52 billion for the July-August period against sale revenue was worth Tk 3.25 billion for the same period," said the official.
The meeting was told that BPDB faces further losses worth Tk 590 million for purchasing power from a lone rental power plant.
The annual losses projected by the BPDB during the meeting will be around Tk 13.05 billion.
In fiscal 2007-08, the government provided the BPDB Tk 6.0 billion as subsidy to make up for the losses it incurred due to maintain supply situation.
Currently, the country is generating around 3500 megawatt (MW) of electricity against the demand for 4500 MW.
Power secretary M Fauzul Kabir said the country will be able to add more than 700 MW to the national grid by 2009.
The additional generation will come from small IPPs, rental power plant and state-owned under-construction Fenchuganj and Siddirganj power plants.
Despite the addition of the power to the national grid the shortfall will remain almost the same as the country's annual demand is growing at a rate of around 10 per cent, the official said.
The PDBD is marketing power through four state-run companies.
They are Rural Electrification Board (REB), Dhaka Power Development Company Limited (DPDCL), Dhaka Electric Supply Limited Company (DESCO) and West Zone Power Distribution Company Limited (WZPDCL).
The caretaker government is selling electricity to the consumers at a rate 28 per cent lower than its cost for purchasing from independent power producers (IPPs), officials of finance and power ministries said Saturday.
It has been forced to purchase electricity from the IPPs at higher rate due to poor generation by state-run power producers under the Bangladesh Power Development Board (BPDB).
The cost for purchasing power from the IPPs ranges between Tk 1.30 and Tk 7.0 per unit.
The officials said the government policy of subsidising electricity for general consumers is the reason behind the wide gap between buy and sale prices.
The BPDB losses were worth Tk 1.27 billion in July-August period of the current fiscal year for purchasing power from the existing six IPPs, said a finance ministry official quoting a review meeting.
The review meeting by the finance ministry was held early this month to take stock of the country's power situation and losses by the BPDB.
"The purchase cost of electricity from the IPPs was Tk 4.52 billion for the July-August period against sale revenue was worth Tk 3.25 billion for the same period," said the official.
The meeting was told that BPDB faces further losses worth Tk 590 million for purchasing power from a lone rental power plant.
The annual losses projected by the BPDB during the meeting will be around Tk 13.05 billion.
In fiscal 2007-08, the government provided the BPDB Tk 6.0 billion as subsidy to make up for the losses it incurred due to maintain supply situation.
Currently, the country is generating around 3500 megawatt (MW) of electricity against the demand for 4500 MW.
Power secretary M Fauzul Kabir said the country will be able to add more than 700 MW to the national grid by 2009.
The additional generation will come from small IPPs, rental power plant and state-owned under-construction Fenchuganj and Siddirganj power plants.
Despite the addition of the power to the national grid the shortfall will remain almost the same as the country's annual demand is growing at a rate of around 10 per cent, the official said.
The PDBD is marketing power through four state-run companies.
They are Rural Electrification Board (REB), Dhaka Power Development Company Limited (DPDCL), Dhaka Electric Supply Limited Company (DESCO) and West Zone Power Distribution Company Limited (WZPDCL).