Persisting power crisis takes its toll
Saturday, 25 October 2008
Shaqeel Quasem
POWER or electricity is counted as virtually the life-blood of a modern economy. Economic activities from the very vital production processes to distribution and even marketing are all dependent on power supply that is ample and reliable. Many factors are there to explain underinvestment and underproductivity in the Bangladesh economy. However, a main one among them is the persisting crisis in relation to power.
Industries of all types are the worst sufferers as these must have uninterrupted power in all cases to keep their machineries functioning, as scheduled. But these schedules are frequently disrupted from chronic power outages for indefinite periods. The same then takes a heavy toll in the form of lengthening the production time and increasing overall production costs. Remaining competitive or producing at costs at least at par with rivals if not lower should be the mantra of all enterprises. But this key aspiration is found too often frustrated in the Bangladesh context due to the poor power supply in the form of its unreliability. No wonder the rate of local and foreign investments alike continues to trail behind the otherwise optimistic projections because potential investors in industries are ultimately discouraged by the visions of frequent power failures and the consequent burdens to descend on their contemplated industrial units.
Credible studies came up with a figure of $ 780 million which is lost to the Bangladesh economy annually on account of its chronically failing power systems. This amount is 1.72 per cent of the national gross domestic product (GDP) and 11.54 of the industrial sector GDP. The losses indicated are quite substantial and underlines the imperative of treating the power sector on highest priority basis to cut down such power related losses. Improving power generation and, equally important, its efficient distribution, have become very pressing necessities for the existing entrepreneurs to remain viably in operation as well as to motivate new ones to try their hand at entrepreneurship.
A scheme was started nearly two years ago to improve transmission of power in the Dhaka region. But it is still dragging on with no end in sight though it was planned for implementation very quickly to give relief to power customers especially to its industrial users. Even after the completion of these projects, the situation might not improve to the desired degree at the field level because unscrupulous ones are there in the service and maintenance departments who purposefully harass the customers, particularly industrial and commercial customers, to gratify their rent seeking instincts. Reportedly, power is shut off deliberately during peak production time in some industrial areas to arm-twist industrial operators into paying money to these maintenance people who do not usually attend to faults in the lines or even create them so that they can get underhand payoffs for fixing them. Thus, terminating such corruption is as indispensable as building stronger or more capacities in the power sector.
POWER or electricity is counted as virtually the life-blood of a modern economy. Economic activities from the very vital production processes to distribution and even marketing are all dependent on power supply that is ample and reliable. Many factors are there to explain underinvestment and underproductivity in the Bangladesh economy. However, a main one among them is the persisting crisis in relation to power.
Industries of all types are the worst sufferers as these must have uninterrupted power in all cases to keep their machineries functioning, as scheduled. But these schedules are frequently disrupted from chronic power outages for indefinite periods. The same then takes a heavy toll in the form of lengthening the production time and increasing overall production costs. Remaining competitive or producing at costs at least at par with rivals if not lower should be the mantra of all enterprises. But this key aspiration is found too often frustrated in the Bangladesh context due to the poor power supply in the form of its unreliability. No wonder the rate of local and foreign investments alike continues to trail behind the otherwise optimistic projections because potential investors in industries are ultimately discouraged by the visions of frequent power failures and the consequent burdens to descend on their contemplated industrial units.
Credible studies came up with a figure of $ 780 million which is lost to the Bangladesh economy annually on account of its chronically failing power systems. This amount is 1.72 per cent of the national gross domestic product (GDP) and 11.54 of the industrial sector GDP. The losses indicated are quite substantial and underlines the imperative of treating the power sector on highest priority basis to cut down such power related losses. Improving power generation and, equally important, its efficient distribution, have become very pressing necessities for the existing entrepreneurs to remain viably in operation as well as to motivate new ones to try their hand at entrepreneurship.
A scheme was started nearly two years ago to improve transmission of power in the Dhaka region. But it is still dragging on with no end in sight though it was planned for implementation very quickly to give relief to power customers especially to its industrial users. Even after the completion of these projects, the situation might not improve to the desired degree at the field level because unscrupulous ones are there in the service and maintenance departments who purposefully harass the customers, particularly industrial and commercial customers, to gratify their rent seeking instincts. Reportedly, power is shut off deliberately during peak production time in some industrial areas to arm-twist industrial operators into paying money to these maintenance people who do not usually attend to faults in the lines or even create them so that they can get underhand payoffs for fixing them. Thus, terminating such corruption is as indispensable as building stronger or more capacities in the power sector.