In an exclusive interview with The Daily Star recently, State Minister for Power Iqbal Hasan Mahmud said Desa owes Tk 4,000 crore to Power Development Board (PDB), compared to only Tk 1,500 crore that public and private sector power consumers owe to Desa.

"No trace of the rest of the money [Tk 2,500 crore]," acknowledged the state minister bitterly regretting that many of the Desa engineers own four to five houses each in the city.

Asked whether any government action would come to recover the huge sum lost to corruption and crimes, Iqbal said, "We've reached such a situation thanks to years of irregularities and mismanagement. What we're now trying to do is to borrow money for immediate bailout of Desa as well as the PDB."

Desa, an electricity distribution body formed in the early 90s as the firstborn of a power sector reform prescribed by donors, supplies power bought from the PDB to consumers in its command area and collects bills. But over the last one decade it has defaulted in paying power purchase bills worth Tk 4,000 crore to the PDB putting the latter in a bad state.

Iqbal told to The Daily Star that the government would borrow money from Asian Development Bank (ADB) at a concessional rate of interest to pay Desa the public sector's electricity bill arrears. The Desa will also borrow from the ADB to pay its unpaid bills to the PDB, he added.

"Only then we'll be able to overhaul the PDB infrastructure," hoped the state minister who claimed credit for reducing the national systems loss in power from 30.3 percent in 2001 to 25.4 percent and raising bill collection efficiency from 84.3 percent in 2001 to 97.2 percent now, besides reducing annual load-shedding hours from 1,100 hours in 2001 to 700 hours in 2003.

Iqbal expressed dismay at power thefts by many bulk consumers saying many of them are getting away with paying for only one-tenth of the power they consume.

On power bill default by the public sector bodies, he said different government offices have accumulated unpaid power bills of Tk 120 crore and some jute mills owe the Desa and the PDB Tk 150 crore in arrears.

On bringing the power bill defaulters to book, the state minister said the mild punishments provided in the Electricity Act of 1910 are not effective any more. "In the model of the stringent laws in the Indian states of West Bengal and Tamil Nadu, we're going to table a new electricity act in parliament within the next six months," he announced.

About the current demand and supply status of electricity in the country, Iqbal said, against a 4,000 MW demand, "We have the capacity now to generate a maximum of 3,600 MW."

Countering the criticism that his ministry has generated almost no additional power since he took over office in late 2001, Iqbal mentioned the 250 MW Siddhirganj power plant the prime minister will inaugurate on December 18 and the 100 MW one in Tongi to be commissioned in January 2005. He also named a few other power plants expected to be operational within the next few years.

"When I took over, I understood that only additional power generation will not help us improve the country's power scenario, rather we require to better the dismal situation in distribution. So I took a move to enhance the efficiency in distribution lines, besides going for massive maintenance and overhauling, which raised power generation by over 400 MW by the existing plants," Iqbal explained.

On reform issues, the state minister said, since the country's independence, "We've never calculated how much money we invested and what's the return. PDB employees thought they were here to make money for themselves and the subscribers thought they don't need to pay."

In 1986, he recalled, the World Bank raised the alarm, saying, "You can't run it [the power sector] as a charity. Then the reform started with the formation of Desa in 1991. But again, we had no alternate proposals; we did what the donors prescribed. The reality is the Desa is just a chip of the PDB -- old wine in a new bottle."

"In 10 years Desa has lost Tk 10,000 crore to widespread thefts and failed to pay the bills of PDB, handicapping the latter in refurbishing its old power units. That again gave rise to yet more problems," Iqbal lamented.

He said the demand for new power connections is rising by 22 percent a year and the sector requires $18 billion in investment up to 2020 to help the economy achieve a double-digit growth rate.