Soaring power subsidy

With the shutting down of the country's largest private power plant at Meghnaghat, the country's power scenario that apparently looked to be improving despite the heavy toll caused by the quick rental power plants (QRPP), is experiencing much unease. Observers believe, if the current situation persists for sometime more, the government might have a tough time feeding the QRPPs for generation of electricity.
The authorities, understandably, have no choice at the moment but to purchase additional electricity from the QRPPs at higher rates. As a result, government subsidy has reportedly shot up more than 20 per cent on account of purchase of electricity from the oil-run rental plants to make up for the shortfall of 450 megawatts due to the closure of the Meghnaghat plant. The gas-fired plant was shut following a fire incident in April this year.
The plant was set up by an American company in 2003 under build-own-operate (BOO) arrangement, but changed hands twice before being taken over by a Malaysian company. The plant used to produce nearly 6,400 megawatts -- around 7.0 per cent of the country's average generation of electricity.
With the increased dependence of the Bangladesh Power Development Board (BPDB) on the QRPPs, the subsidy bill on account of import of diesel by these plants might rise to Tk 85 billion as against Tk 70 billion allocated under the national budget. Uncertainty as to the resumption of operation of the plant has further dented the prospect of recovering from the soaring subsidy burden.
It hardly needs mentioning that ever since the QRPPs came into existence, saddled with whooping subsidy load, critics did not welcome them as a solution to the country's floundering energy system. These rental plants, at their best, are makeshift measures meant only to serve a temporary period of time. The government, too, apparently agreed that these were but transitional arrangements in view of the severe power scarcity prevailing at that time. That was quite sometime ago; but the fact that these oil-fired plants are still in existence -- that too with their ever-mounting subsidy needs -- makes things look dubious. Alleged patronage from the government, reportedly, figures prominently when it comes to running these white elephants with astronomical amounts from the state coffer.
Now that the BPDB is increasingly reliant on these rental plants, more so because of the closure of the Meghnaghat power plant, it looks uncertain whether the authorities are really up to any tangible plans to overcome the lingering power crisis. With a portion of the money spent so far as subsidy, the government could have gone for plants of its own to gain long-term, tangible benefits. It has been observed time and again that the government is dismissive of criticisms on the rental plants, disregarding the fact that the conscientious sections of the citizens approve of the need for the QRPPs only as a transitional measure. But depending on them for too long, as the case is now, must not form the basis of the government's power sector policy.