Power sector incurs Tk 336b losses over the past decade
Tuesday, 20 November 2007
FE Report
The country's power sector incurred financial losses to the tune of Tk 335.63 billion over the past one decade following mismanagement and irregularities.
This was revealed Monday in a study report prepared by the Transparency International Bangladesh (TIB).
Of the amount, Tk 230 billion accounted for losses sustained by corrupt practices in the sector.
The TIB organised a discussion meeting at the National Press Club Monday to mark the publication of the study report.
TIB Trustee Board Chairman Professor Muzaffar Ahmed presided over the meeting while TIB Executive Director Iftekharuzzaman conducted the programme.
TIB research officer Md Jakir Hossain presented the study report at the programme.
TIB said the financial loss is equivalent to generation cost for 9500 megawatt power.
The report claimed losses worth Tk 40 billion have been incurred during fiscals 1996-2005 following irregularities committed at the time of purchase of six power plants and subsequent maintenance by a foreign company.
The subscribers had paid Tk 4.47 billion as bribes during 2005-06 fiscal year while obtaining new power connections.
Production losses due to voltage fluctuation in different industrial units accounted for Tk 83.55 billion during 2005-06 fiscal, the report said.
The report also said that the power sector lost Tk 18.24 billion as there were not enough gas-fired power stations in the country.
Pilferage and system loss cost the sector Tk 189.30 billion in losses, according to the study.
The study observed that the suffering of the people and the industrial enterprises had been increasing following inefficiency in production, transmission and distribution systems.
The report also observed that consecutive governments had failed to give due importance to the sector.
The contribution of power sector to the gross domestic product (GDP) is gradually decreasing due to the lack of accountability and transparency.
Besides, political intervention and poor coordination among different departments are also responsible for low contribution to the GDP, the report said.
The report also said customer satisfaction at the industrial belts are shrinking and stands at 60 per cent, the report said.
The report said that the government could earn additional Tk 18.53 billion once the existing system loss is reduced to 12 per cent.
However, the Power Development Board has unrealised bills worth Tk 43.90 billion, DESA worth Tk 7.88 billion and Rural Electrification Board (REB) worth Tk 4.64 billion.
The report said that at least 27 per cent of the applicants for new connections faced harassments.
The report also said the customers' harassments increase when they require the bills to be rectified by the power offices.
The report said at least 90 per cent customers suffered 45 hours of load shedding a month in 2005-06 fiscal and the minimum fees were not waived in such cases.
However, the TIB suggested that a power ombudsman might be appointed to check different irregularities and mitigate customers' sufferings.
Implementation of Engineer's Act, empowerment of the BPDB to punish defaulters, establishing of one-stop services etc., were necessary to improve the services, the report suggested.
An independent feeder establishment for the industrial zones is also necessary for the sector, the report advocated.
It also suggested monitoring of the REB chain of command by an independent commission, introducing pre-paid metering and transparency in the activities of the collective bargaining agencies to upgrade its services.
Introduction of under-ground cable system, corporatisation of PDB and DESA distribution system were also recommended.
Apart from this, encouraging local entrepreneurs to invest in the sector, raising the effectiveness of the energy regulatory commission and improving human resources in the power sector were also recommended to improve the services.
Former PDB Chairman Quamrul Islam Siddiqui, PDB member Alamgir Kabir, Summit Power director Farukh Khan and other officials also spoke in the programme.
The country's power sector incurred financial losses to the tune of Tk 335.63 billion over the past one decade following mismanagement and irregularities.
This was revealed Monday in a study report prepared by the Transparency International Bangladesh (TIB).
Of the amount, Tk 230 billion accounted for losses sustained by corrupt practices in the sector.
The TIB organised a discussion meeting at the National Press Club Monday to mark the publication of the study report.
TIB Trustee Board Chairman Professor Muzaffar Ahmed presided over the meeting while TIB Executive Director Iftekharuzzaman conducted the programme.
TIB research officer Md Jakir Hossain presented the study report at the programme.
TIB said the financial loss is equivalent to generation cost for 9500 megawatt power.
The report claimed losses worth Tk 40 billion have been incurred during fiscals 1996-2005 following irregularities committed at the time of purchase of six power plants and subsequent maintenance by a foreign company.
The subscribers had paid Tk 4.47 billion as bribes during 2005-06 fiscal year while obtaining new power connections.
Production losses due to voltage fluctuation in different industrial units accounted for Tk 83.55 billion during 2005-06 fiscal, the report said.
The report also said that the power sector lost Tk 18.24 billion as there were not enough gas-fired power stations in the country.
Pilferage and system loss cost the sector Tk 189.30 billion in losses, according to the study.
The study observed that the suffering of the people and the industrial enterprises had been increasing following inefficiency in production, transmission and distribution systems.
The report also observed that consecutive governments had failed to give due importance to the sector.
The contribution of power sector to the gross domestic product (GDP) is gradually decreasing due to the lack of accountability and transparency.
Besides, political intervention and poor coordination among different departments are also responsible for low contribution to the GDP, the report said.
The report also said customer satisfaction at the industrial belts are shrinking and stands at 60 per cent, the report said.
The report said that the government could earn additional Tk 18.53 billion once the existing system loss is reduced to 12 per cent.
However, the Power Development Board has unrealised bills worth Tk 43.90 billion, DESA worth Tk 7.88 billion and Rural Electrification Board (REB) worth Tk 4.64 billion.
The report said that at least 27 per cent of the applicants for new connections faced harassments.
The report also said the customers' harassments increase when they require the bills to be rectified by the power offices.
The report said at least 90 per cent customers suffered 45 hours of load shedding a month in 2005-06 fiscal and the minimum fees were not waived in such cases.
However, the TIB suggested that a power ombudsman might be appointed to check different irregularities and mitigate customers' sufferings.
Implementation of Engineer's Act, empowerment of the BPDB to punish defaulters, establishing of one-stop services etc., were necessary to improve the services, the report suggested.
An independent feeder establishment for the industrial zones is also necessary for the sector, the report advocated.
It also suggested monitoring of the REB chain of command by an independent commission, introducing pre-paid metering and transparency in the activities of the collective bargaining agencies to upgrade its services.
Introduction of under-ground cable system, corporatisation of PDB and DESA distribution system were also recommended.
Apart from this, encouraging local entrepreneurs to invest in the sector, raising the effectiveness of the energy regulatory commission and improving human resources in the power sector were also recommended to improve the services.
Former PDB Chairman Quamrul Islam Siddiqui, PDB member Alamgir Kabir, Summit Power director Farukh Khan and other officials also spoke in the programme.