Rental power plants and roadshows
Monday, 14 December 2009
WITH the advent of the winter season, the incidents of power load shedding are otherwise expected to decline because of lower consumption of power in residential houses, offices and market places. The power subscribers who suffer much during summer days should, therefore, be relieved, more or less, of the frequent power outages. However, they know for sure that the relief is temporary and the menace of power outages would stage a comeback in the next summer and continue until the next winter. But are the decision-makers oblivious of that fact?
Possibly, they are. Notwithstanding the fact that the government leaders have been talking about plans for setting up power plants and to import power from neighbouring countries, their actions are falling far short of their stated objective of boosting the availability of power to meet an ever-increasing demand for the same within the shortest possible time. A case in point is the move for buying electricity from rental power plants to be set up by private sector entrepreneurs under a government plan. Following invitation of bids last September by the Power Development Board (PDB) for setting up rental power plants at eight locations of the country, there was a good response from entrepreneurs, including many having no experience in commercial power generation.
However, the Board selected five bids for setting up power plants, one each at Barisal, Bheramara, Jamalpur, Noapara and Thakurgaon with a total power generation capacity of 350 megawatt (MW) and sent the same to the cabinet committee on government purchase. This was done for obtaining approval of such plants so that it could award contract within the timeframe-November 2009, set in the original schedule. Despite being on the agenda of discussion, the cabinet committee did not take any decision on the bids at its meeting held last Thursday. This means that awarding of contracts for setting up power plants is unlikely to take place within this calendar year. This development reminds many of similar delays in taking decision relating to the establishment of power plants, big and small, during the BNP-led alliance government that does rightly come under scathing criticism of the leaders of the incumbent government for the failure to generate adequate power.
The reason/s for the cabinet committee not taking any decision on the PDB-submitted bids in its last meeting is not known. However, the reason/s could be economic or otherwise. The cabinet body might have decided to further scrutinise the bids, which, if accepted, would compel the PDB to procure power at relatively higher costs. One also cannot rule out the possibility of influence-peddling by the people whose bids failed to get PDB nod. The use of connections with influential people in getting business contracts or bids is otherwise common in this country.
Actually, the present deplorable state of the power sector is the outcome of the successive governments' lack of seriousness to implement a number of donor-funded big power projects having a combined generation capacity of 1500 MW. Donor agencies committed funds worth about $ 3.0 billion for seven power plants and what they demanded of the government was transparency in the bidding process. The shortage of gas is often cited as a major reason for not starting the implementation of the donor-funded projects. If that is true, why is the power ministry wasting money by organising roadshows abroad to woo foreign investment in the power sector?
The government cannot afford the purchase of power in bulk from private power producers, local or foreign, dependent on fuels other than cheap gas. The power and energy ministry has a plan to build a liquefied natural gas terminal and import gas for feeding the power plants. The ministry should take up that project first before embarking on the high-sounding power projects or roadshows abroad.
Possibly, they are. Notwithstanding the fact that the government leaders have been talking about plans for setting up power plants and to import power from neighbouring countries, their actions are falling far short of their stated objective of boosting the availability of power to meet an ever-increasing demand for the same within the shortest possible time. A case in point is the move for buying electricity from rental power plants to be set up by private sector entrepreneurs under a government plan. Following invitation of bids last September by the Power Development Board (PDB) for setting up rental power plants at eight locations of the country, there was a good response from entrepreneurs, including many having no experience in commercial power generation.
However, the Board selected five bids for setting up power plants, one each at Barisal, Bheramara, Jamalpur, Noapara and Thakurgaon with a total power generation capacity of 350 megawatt (MW) and sent the same to the cabinet committee on government purchase. This was done for obtaining approval of such plants so that it could award contract within the timeframe-November 2009, set in the original schedule. Despite being on the agenda of discussion, the cabinet committee did not take any decision on the bids at its meeting held last Thursday. This means that awarding of contracts for setting up power plants is unlikely to take place within this calendar year. This development reminds many of similar delays in taking decision relating to the establishment of power plants, big and small, during the BNP-led alliance government that does rightly come under scathing criticism of the leaders of the incumbent government for the failure to generate adequate power.
The reason/s for the cabinet committee not taking any decision on the PDB-submitted bids in its last meeting is not known. However, the reason/s could be economic or otherwise. The cabinet body might have decided to further scrutinise the bids, which, if accepted, would compel the PDB to procure power at relatively higher costs. One also cannot rule out the possibility of influence-peddling by the people whose bids failed to get PDB nod. The use of connections with influential people in getting business contracts or bids is otherwise common in this country.
Actually, the present deplorable state of the power sector is the outcome of the successive governments' lack of seriousness to implement a number of donor-funded big power projects having a combined generation capacity of 1500 MW. Donor agencies committed funds worth about $ 3.0 billion for seven power plants and what they demanded of the government was transparency in the bidding process. The shortage of gas is often cited as a major reason for not starting the implementation of the donor-funded projects. If that is true, why is the power ministry wasting money by organising roadshows abroad to woo foreign investment in the power sector?
The government cannot afford the purchase of power in bulk from private power producers, local or foreign, dependent on fuels other than cheap gas. The power and energy ministry has a plan to build a liquefied natural gas terminal and import gas for feeding the power plants. The ministry should take up that project first before embarking on the high-sounding power projects or roadshows abroad.