Chronicle
From energy gap to energy crisis
Nururddin Mahmud Kamal
Our energy troubles did not erupt overnight last summer. During a protracted heat wave, there were widespread power breakdowns. Utility organizations were forced to cut back services. The western part of country received less electricity help from the eastern part, where almost eighty five percent of the total gas based electricity generating units are stationed. In the western part, fuel-oil or diesel-based electricity generation is moving towards a difficult phase. The need for use of more gas-based electricity there seems vital. A power infrastructure has be built within the next five to seven years, with emphasis on the western part of the country to balance the ever increasing power shortage. The newspapers in Dhaka carried front-page stories that there was gas shortage in winter and load shedding in summer. But, as usual, the Ministry of Energy either ignored the prevailing difficulties or did not find any truth in those news items. The people were caught by surprise due to the recent Barapukuria coal mine explosion and Titas gas well flare, but they pointed their fingers towards the government in general and the Energy Ministry in particular. Some public sector bodies such as Petrobangla and the Power Development Board paid very little attention to their assigned responsibilities because they were busy in manipulating tender documents and corruption. The media also reported that a serious blame game was going on between the country's bureaucrats and the political pundits. Some of them are now suffering the unbearable heat in jail, and scorching criticism from many corners. One bureaucrat sneaked away from the country; perhaps expecting to return as usual to hold higher position in future. Some alleged corrupt bureaucrats are still safe. It appears that due to politico-bureaucratic clique in Bangladesh's energy sector management, the situation may not improve soon. This is not a pessimistic attitude, rather a realistic one that must change soon. From late 2005, the energy sector activities continued to deteriorate fast. Yet, no one in the government, including the energy minister (who happened to be the honourable prime minister), was visibly perturbed. However, the last state minister for power of the previous political government, Maj. General Talukdar, before his exit, gave inside-information, including the missing 6,000 crore taka in the power sector. He also let the citizens know about the irregularities in the proposed Meghnaghat-2 450MW and Chandpur 150 MW projects in particular. After about four months, since the present caretaker government took over power, the authorities okayed five controversial power projects based on the recommendations of an experts' committee headed by Professor Abdul Matin Patwari. The media story is that the committee cleared these projects not because they found them to be clean but, because of the persisting power crisis, the country cannot afford to sit on new power projects! Perhaps, they have a point. But people want to know what was the ministry doing since, at least, January 11? They knew that those tenders (including Meghnaghat-2 and Chandpur 150 MW) were not only non-transparent; they were corrupt bids as well. Instead of Rejecting them, the Ministry of energy intends to make them "halal" through the experts' committee. One would be tempted to question the goodness of our government from this avoidable act. Fresh tenders could easily be called. As a general practice of international tendering, 45 days for tender dropping and 30 days for evaluation of bids would have solved the matter. In 1997, under the first ever Independent Power Projects (IPPs), a clean, transparent, and internationally accepted tender document was floated for a 450 MW Meghnaghat project, which was commissioned in about four years. With minimum moditications in the tariff structure, payment in taka, fuel supply agreement (FSA) and the land lease agreement (LLA) within a month or so, negotiations with PTC qualified participants could start. As an additional information, a similar document was also perhaps prepared for the aborted Sirajganj 450 MW power plant. People will be flabbergasted when they hear that a non-transparent and unclean tender was being considered instead! This is not on allegation. But people would have been happy if they were not cheated. Incidentally, the present power crisis cannot be met only by implementing the proposed combined cycle power project. If it is really given a "go" signal, the proposed 450 MW Meghnaghat-2 project would probably get operationalized by 2011, when the country's gas supply would start to decline fast and the present proven gas reserve will be exhausted, by 2015 (Gas sector Master Plan, 2006). Secondly, the concept of "rental power" would not only be financially ruinous but supply will also fall flat. Rental power at best can be procured for 3 to 5 years, but a 15-year operational life will turn into an operational oversight. So, the government needs to be more cautious. Indeed, what was happening concerning gas and coal mining was only part of the energy drama, which is now moving toward its climax. The government's, and some professionals (from BUET), forecast for gas demand proved inaccurate. They anticipated neither the interaction of changing energy developments nor the big jump in consumer gas demand over the past several years. To make matters worse, they put their bets on the wrong horse that never arrived in the energy domain of Bangladesh. For instance, from a maximum demand of 1,142 million cubic feet (Mcf) per day in 2002, the demand has exceeded 1,670 Mcf in 2007, a hard to believe story, in about five years! The BGFCL and the energy ministry officials seem to have succumbed to the April 18 disaster like cowards. They even forgot to meticulously follow the international gas field practice, and are now playing into the hands of gas brokers instead of seeking assistance from reputed independent expert services such as Red Adair of USA. In the 1990s, some 700 oil well fires were extinguished by such professional services within a reasonably short time frame. Titas well number three is still bleeding after destroying huge natural gas by now. People are wondering why a snubbing unit was bought to kill the well? Unocal/Occidental did not have to procure equipment at a high price for extinguishing the Magurcharra or Tengratilla gas blowouts. Instead, the company hired the services of experts. People are saying that the energy secretary Mr Nasiruddin is venturing to enter into a new, contentious deal to "Snub" the citizens of Bangladesh. Our concern is that those who warned the government, in 2003-04, of an impending energy crisis that did not occur, were accused of crying wolf. The wolf was indeed at the door earlier, in winter 2005; he has merely gone away for a time. He did come back in 2006 and showed his teeth. But the government was so complacent that it even forgot to appreciate the ominous signals, rather ignored them. As a result, electricity situation worsened in 2007, the peak summer load shedding may rise upto 2500 MW. Many people by now know that we are in the midst of environmental problems. Like the energy crisis, it had been long in the making in Bangladesh, and the two are interrelated. Concerns about what we are doing to our environment had been increasing steadily for the past decade or so. Social protests were beginning to crystallize on both the professional and the activist level. Thanks to Bangladesh Paribesh Andolon (BAPA), and its competent chair, Dr Muzaffar Ahmed, for their tireless and sincere efforts to help mitigate the environmental concerns through people's participation. Suddenly, the under discussion energy secretary found a new ball game. He, in an unambiguous voice, uttered: "The draft coal policy will be approved by June 2007." Everybody knows that the proposed anti-people policy is very closely linked with Asia Energy Company's open-pit proposal that they want to buy against a 6 percent royalty. The Phulbari coalfield, for instance, has a total coal reserve of 572 million tons. The estimated price of the coal would be around $34 billion at $60 per ton. Through a royalty payment of $7 billion, the "ownership" of coal will be transferred to Asia Energy Company. This is not commensurate with the country's constitutional provisions. I plan to write about the subject soon. Yes, I am neither an expert on constitution nor even a law practioner. But, I presume, I can appreciate that with royalty payments the "ownership" of coal/mineral that belongs to the people of Bangladesh as per constitution cannot be transferred outright to a foreign company. One would wonder, why the energy secretary Mr Nasiruddin is so keen on pursuing such a contentious draft coal policy now? Now, it is only natural that officials who enjoy many financial benefit/rewards and advantages from the government, BGFCL and Bapex should be absolved of criminal responsibility when things go wrong. The authorities must, therefore, not try to protect the higher management of the companies operating under companies law when casualties result from inaction of the company executives. Petrobangla's concerned supervisory officials must also have to explain their conduct during the two disasters, one regarding Barapukuria coal mine and the other about Titas gas field, in the recent months. Investigation documents should be made public. In conclusion, we painfully observed earlier that political panic had reached an apogee during 2004-06 with respect to our energy sector activities. We neither hope nor wish for recurrence of such incidents that turned the energy gap into deep energy crisis. The sooner we realise this, the sooner we will stop stepping on our own feet and creating more energy problems rather than solving the ones we are faced with now. The author is a former senior official of the Ministry of Energy and a former chairman of Bangladesh Gas Field Company.
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