Restriction on new gas and power connections: economy standstill
Saturday, 12 March 2011
Abul Quasem Haider
The economy of Bangladesh is undergoing the most critical crisis since her independence. It experienced a tremor with the taking over of the army-backed caretaker government in 2006. Following this tremor, another repercussion once again has shocked the economy with the bar on new connection of gas and power. The economic devastation during the caretaker government in 2006 was keenly felt and its aftermath was seen everywhere from a large industry to even a small village market. With a landslide victory in 2009, all expected that the Awami League would give a new life to the already suffocating, overcharged and highly tensed economic condition by taking necessary steps. But the wheel of the economy of Bangladesh has failed to cope with expected acceleration. Standstill economy: On account of paucity of power and gas many major industries have fallen short of their production capacity. It is very painful to note that many, by now, are unable to go for their normal production capacity with no fault of their own. The shortfall in production, however, is turning the economy to be import-dependent. Our export volume is also falling short. With no further approval of new factories and no investment in the pipeline, the growth of industrialisation is almost zero. That's a reason as many experts expressed the view that with the idle money in hand many leading industrialists have move to the share market; and this is how the capital market became overvalued. To break down this deadlock, nothing significant on the part of the government has been done. Mr Dilip Barua, Minister for Industries, a communist by belief, must do something to countercheck this industrial inertia. If we analyse the data of the total export-import volume of previous couple of years, we will notice that our import volume is increasing day by day. Significantly enough, the import volume of such items that we are already manufacturing is increasing. As we all know that we have attained world class quality in many items. Despite that we are to import those items as our companies are not operating with their full production capacity for want of gas and power. The finance minister has acknowledged that our economy is severely hit by the present gas and power crisis. We could have achieved 10 per cent GDP had we been able to solve this problem. According to the sources of the commerce ministry, the import volume of some industries having relation with gas, power, or furnace oil is on the increase. The increase of import volume has increased by 8 per cent in 2008-09 to 2009-10 fiscal years. The investors are pointing out that it is because of the power and gas crisis that has resulted in the imbalance of deficit of export and import. Our export revenue will be increased if the prevailing power crisis can be overcome. And thus the import revenue will be reduced. The growth rate of GDP will be increased. The commerce minister has rightly comprehended the point and thus said that we can increase our export revenue if we can solve the power and gas crisis. Many industries are badly suffering for the power and gas crisis. Measures are to be taken right now for these industries. We are to confirm the supply of gas and power to these industries. We are to adopt a long-term policy on the matter. With it, we need to consider the world scenario. But the power and gas crisis is held responsible for the present crisis for not allowing mega projects to operate. We have some small industries operating in the country. The secretary for power has said the situation will improve next year. The Chairman of Petrobangla Dr Hossain Monsur has said the situation will be substantially improved by the year 2012. The government has taken steps to import LNG. The ministry concerned has issued orders to set up pipeline. It is believed that we will be able to import LNG in next two years. Through it, the situation will be tackled partially. The production might be increased by this time. But it will not solve the crisis completely. Many power plants based on furnace oil are being installed to lessen the pressure on gas. New connections of gas and power are totally closed down for want of the supply of gas and power. The authorities concerned are not capable of meeting the demand of the existing subscribers. Remedies: In order to protect the economy from being collapsed, we are to take comprehensive measures. The government has already approved many power plants based on furnace oil which will generate 2,000 megawatt of electricity in one or two years. But the production is very meagre in comparison with the demand. Keeping Vision 2021 in mind, the government has to take pragmatic measures in the gas and power sector. To materialise the dream, the government will have to generate 20,000 megawatt by this time. As the gas reserve is exhausting, we are to focus on coal-based power plants. The government has entered into a contract of power purchase of 2,000 megawatt with India. The prevailing deficit in gas supply amounts to 300 million cft per day. The production of many factories is severely affected by the deficit in gas supply and it hits half of their production capacity. To increase the gas supply, we are to explore new gas fields as well as set up new wells. If we fail to do so, our already established factories will be closed down. That is why we need to empower Petrobangla so that it can go for its objectives afresh. Every year the demand of gas and power is on the increase. So, we are to find alternative sources of energy. From now on we are to look into the potentials of solar, wind, and atomic energy. Unknown to many, the then Pakistani government took a plan of setting up an atomic power plant in Ruppur which we could not materialise over the years. Hopefully enough, the government has signed a MoU with Russia to set up an atomic power plant. We need to focus on this type of power plants and sign a MoU with China too. (The writer is the founder chairman of Eastern University and former vice-president of FBCCI.)
The economy of Bangladesh is undergoing the most critical crisis since her independence. It experienced a tremor with the taking over of the army-backed caretaker government in 2006. Following this tremor, another repercussion once again has shocked the economy with the bar on new connection of gas and power. The economic devastation during the caretaker government in 2006 was keenly felt and its aftermath was seen everywhere from a large industry to even a small village market. With a landslide victory in 2009, all expected that the Awami League would give a new life to the already suffocating, overcharged and highly tensed economic condition by taking necessary steps. But the wheel of the economy of Bangladesh has failed to cope with expected acceleration. Standstill economy: On account of paucity of power and gas many major industries have fallen short of their production capacity. It is very painful to note that many, by now, are unable to go for their normal production capacity with no fault of their own. The shortfall in production, however, is turning the economy to be import-dependent. Our export volume is also falling short. With no further approval of new factories and no investment in the pipeline, the growth of industrialisation is almost zero. That's a reason as many experts expressed the view that with the idle money in hand many leading industrialists have move to the share market; and this is how the capital market became overvalued. To break down this deadlock, nothing significant on the part of the government has been done. Mr Dilip Barua, Minister for Industries, a communist by belief, must do something to countercheck this industrial inertia. If we analyse the data of the total export-import volume of previous couple of years, we will notice that our import volume is increasing day by day. Significantly enough, the import volume of such items that we are already manufacturing is increasing. As we all know that we have attained world class quality in many items. Despite that we are to import those items as our companies are not operating with their full production capacity for want of gas and power. The finance minister has acknowledged that our economy is severely hit by the present gas and power crisis. We could have achieved 10 per cent GDP had we been able to solve this problem. According to the sources of the commerce ministry, the import volume of some industries having relation with gas, power, or furnace oil is on the increase. The increase of import volume has increased by 8 per cent in 2008-09 to 2009-10 fiscal years. The investors are pointing out that it is because of the power and gas crisis that has resulted in the imbalance of deficit of export and import. Our export revenue will be increased if the prevailing power crisis can be overcome. And thus the import revenue will be reduced. The growth rate of GDP will be increased. The commerce minister has rightly comprehended the point and thus said that we can increase our export revenue if we can solve the power and gas crisis. Many industries are badly suffering for the power and gas crisis. Measures are to be taken right now for these industries. We are to confirm the supply of gas and power to these industries. We are to adopt a long-term policy on the matter. With it, we need to consider the world scenario. But the power and gas crisis is held responsible for the present crisis for not allowing mega projects to operate. We have some small industries operating in the country. The secretary for power has said the situation will improve next year. The Chairman of Petrobangla Dr Hossain Monsur has said the situation will be substantially improved by the year 2012. The government has taken steps to import LNG. The ministry concerned has issued orders to set up pipeline. It is believed that we will be able to import LNG in next two years. Through it, the situation will be tackled partially. The production might be increased by this time. But it will not solve the crisis completely. Many power plants based on furnace oil are being installed to lessen the pressure on gas. New connections of gas and power are totally closed down for want of the supply of gas and power. The authorities concerned are not capable of meeting the demand of the existing subscribers. Remedies: In order to protect the economy from being collapsed, we are to take comprehensive measures. The government has already approved many power plants based on furnace oil which will generate 2,000 megawatt of electricity in one or two years. But the production is very meagre in comparison with the demand. Keeping Vision 2021 in mind, the government has to take pragmatic measures in the gas and power sector. To materialise the dream, the government will have to generate 20,000 megawatt by this time. As the gas reserve is exhausting, we are to focus on coal-based power plants. The government has entered into a contract of power purchase of 2,000 megawatt with India. The prevailing deficit in gas supply amounts to 300 million cft per day. The production of many factories is severely affected by the deficit in gas supply and it hits half of their production capacity. To increase the gas supply, we are to explore new gas fields as well as set up new wells. If we fail to do so, our already established factories will be closed down. That is why we need to empower Petrobangla so that it can go for its objectives afresh. Every year the demand of gas and power is on the increase. So, we are to find alternative sources of energy. From now on we are to look into the potentials of solar, wind, and atomic energy. Unknown to many, the then Pakistani government took a plan of setting up an atomic power plant in Ruppur which we could not materialise over the years. Hopefully enough, the government has signed a MoU with Russia to set up an atomic power plant. We need to focus on this type of power plants and sign a MoU with China too. (The writer is the founder chairman of Eastern University and former vice-president of FBCCI.)