PC sends back Matarbari plant project for cost rationalisation

The Planning Commission (PC) has sent back the proposed Matarbari 1,200-megawatt coal-based power plant project to the Power Division for faulty electricity pricing and cost estimation of the project, officials said Friday.
The Commission asked the Power Division to rationalise pricing of the produced electricity and the investment cost of Bangladesh's largest development project, they said.
Earlier, the Power Division had sought approval of the Tk 403.21 billion power generation project at Matarbari in Cox's Bazar from the PC.
"The Project Evaluation Committee (PEC) of the PC has had reservation about its estimated electricity generation cost and investment cost for the Matarbari power plant project," a Power Division official said.
"The project proposal has shown the electricity generation cost at nearly Tk 8.0 per kilowatt hour (KwH) which has been found faulty. Besides, costing of different components of the project has also been irrational," a senior PC official said.
"The project executing agency has assessed the financial return from the plant without showing any investment in the first few years of the project cycle (FY2014-FY2026). Ultimately, it does not reflect the real cost," he told the FE requesting anonymity.
In addition, costs of some components of the project have been estimated higher, the official added.
 "After the last PEC meeting at the PC recently, we asked the Power Division to rationalise the cost of the project adjusting economic and financial viabilities," the PC official said.
The Power Division official said they are now working to rationalise and adjust the cost of all the components of the project as per the suggestions of the PEC.
Since the state-owned Coal Power Generation Company Bangladesh Limited (CPGCBL), for the first time, prepared the proposal for setting up of the 1,200MW coal-fired plant, a coal handling port and a township at the Matarbari, there could be some weaknesses in the project preparation, he said.
 "Now all the components of the project will be reviewed further and will be revised properly as per the recommendations of the PEC," the Power Division official added.
Bangladesh's largest bilateral donor Japan International Cooperation Agency (JICA) would bankroll the coal-based power plant partially providing nearly Tk 289.85 billion ($3.7 billion) loans in some few tranches, he added.
The newly-formed CPGCBL will install the plant along with a small deep sea port for unloading imported coal to be used at the proposed plant, a coal silo, ash disposal area, Matarbari-Anwara 61.5 kilometre 400-kilovolt transmission line and an access road.
The Matarbari plant will be developed as a special energy hub, developing township and other facilities, the Power Division official said.
The project will be one of the largest coal-fired plants in the country after the ongoing 250MW capacity Barapukuria plant in northern Dinajpur district.
Bangladesh's power generation is heavily dependent on natural gas which has made the power supply system vulnerable due to lack of new discovery of gas in the country.
The share of gas in the total power generation is now 82.12 per cent, oil 12.61 per cent, hydro 2.78 per cent, and coal 2.49 per cent.