Surprise U-turn
Wednesday, 10 March 2010
THE power ministry is in a state of confusion. It has, apparently, lost its way while finding an appropriate solution to the all-engulfing power crisis. The ministry decided only a few months back to allow installation of a few rental power plants as a stop-gap arrangement to partially meet the ever-increasing power deficit. Five such plants have already received approval of the government. The power ministry has now decided not to allow any more such plants for reasons of non-compliance with bid-terms. The decision, thus, sealed the fate of three more proposed rental power plants at three separate places of the country. Instead, the Power Development Board (PDB), according to a report published in the FE, last week floated international tenders inviting private firms or joint ventures for setting up diesel-fired independent power plants (IPPs) with higher generation capacity at the same locations on build, own and operate (BOO) basis.
There is no denying that IPPs with higher generation capacity are better alternatives. The IPPs have longer life and their cost of generation is far less than that of the rental power plants. A good number of IPPs are already in operation and the PDB has been buying power from those for many years. But the latest decision of the power ministry not to set up any more rental power plants tempts one to raise a few questions about its efficiency level. Why did the ministry waste some valuable months on inviting tenders on rental power plants and processing the same? The issues of non-compliance with conditions set in the bids and higher cost of power generation are nothing new. The BNP-led alliance government and the immediate past caretaker government also approved the installation of some rental power plants. But a good number of these plants and the ones approved by the incumbent government have failed to comply with bid terms and bring their plants online. The power ministry should have taken the negative aspects of such plants into consideration on a priority basis.
The flotation of tenders, selection of bidders and erection of new IPPs would take considerable time. This is a very unwelcome development. Even before the start of the summer season, the power outage is back. All sections of power consumers are now bracing for the worst in the next few months when power load shedding would be an event of every alternate hour. Volumes have been said and written about the people's sufferings due to power crisis. The incumbent government soon after coming to power demonstrated its eagerness to generate more power and lessen the sufferings of the power users. It has tried to attract local private investors in power generation sector and arranged road shows outside the country to attract foreign investors for setting large power plants. The response at the road shows, according to government officials, was encouraging.
Meanwhile, the use of non-renewable energy source remains a problem for the power sector in Bangladesh, which is now reeling under severe gas crisis. The government is yet to make up its mind about the method to be applied for the extraction of a substantial volume of coal deposit, another cheap source of energy. Until the country hits new gas reserves and applies appropriate method for coal extraction, the use of fuel oil, mainly diesel or furnace oil, and imported LPG remain the only alternatives for power generation. But if the ministry concerned handles the power generation issue ineptly as it has done lately, the sufferings of power users would only aggravate in the coming days.
There is no denying that IPPs with higher generation capacity are better alternatives. The IPPs have longer life and their cost of generation is far less than that of the rental power plants. A good number of IPPs are already in operation and the PDB has been buying power from those for many years. But the latest decision of the power ministry not to set up any more rental power plants tempts one to raise a few questions about its efficiency level. Why did the ministry waste some valuable months on inviting tenders on rental power plants and processing the same? The issues of non-compliance with conditions set in the bids and higher cost of power generation are nothing new. The BNP-led alliance government and the immediate past caretaker government also approved the installation of some rental power plants. But a good number of these plants and the ones approved by the incumbent government have failed to comply with bid terms and bring their plants online. The power ministry should have taken the negative aspects of such plants into consideration on a priority basis.
The flotation of tenders, selection of bidders and erection of new IPPs would take considerable time. This is a very unwelcome development. Even before the start of the summer season, the power outage is back. All sections of power consumers are now bracing for the worst in the next few months when power load shedding would be an event of every alternate hour. Volumes have been said and written about the people's sufferings due to power crisis. The incumbent government soon after coming to power demonstrated its eagerness to generate more power and lessen the sufferings of the power users. It has tried to attract local private investors in power generation sector and arranged road shows outside the country to attract foreign investors for setting large power plants. The response at the road shows, according to government officials, was encouraging.
Meanwhile, the use of non-renewable energy source remains a problem for the power sector in Bangladesh, which is now reeling under severe gas crisis. The government is yet to make up its mind about the method to be applied for the extraction of a substantial volume of coal deposit, another cheap source of energy. Until the country hits new gas reserves and applies appropriate method for coal extraction, the use of fuel oil, mainly diesel or furnace oil, and imported LPG remain the only alternatives for power generation. But if the ministry concerned handles the power generation issue ineptly as it has done lately, the sufferings of power users would only aggravate in the coming days.