Industry falters on low energy

Waliur Rahman Bhuiyan

Readymade garment factory owners are in a fix over the future of the industrial sector.
Several factories have shut recently due to inability to churn profits and productivity losses. Owners blamed low gas pressure and frequent power outages in the factories behind the closure. A few days ago, the government decided to maintain gas supplies to the Chittagong industrial zones to improve the staggering gas and power situation.
Owners are also trying to run their units by installing captive power plants on their factory premises, but they are still incurring losses and waiting for adequate supplies of gas and power.
In Bangladesh, load shedding is a common phenomenon and businessmen are constantly facing hurdles because of the short supply.
Waliur Rahman Bhuiyan, the immediate past president of Foreign Investors' Chamber of Commerce and Industry (Ficci), has been advocating an improvement in the energy supply position for the last few years.
The Daily Star talks to him on the issues like energy and industrial development of Bangladesh.
Bhuiyan, also managing director of Bangladesh Oxygen Company (BOC), says everything is linked with energy efficiency.
If the government wants to reduce poverty, it needs to generate employment, for which it needs industrialisation and increased investment. These are directly linked to energy and power.
The number of factories pulling down their shutters is a clear indication of scarce energy. At the same time, the importance of industrialisation is paramount to reducing poverty, he says.
Bhuiyan said a large number of new industries now await gas connections to go into production, but Titas Gas Transmission and Distribution Company Ltd, which provides the largest number of industrial gas connections, has announced that it is not giving any new connections until discovery of more gas.
Around 5,000 industrial units have now Titas gas connections, while another 1,000 have such connections from other gas distributing companies across Bangladesh.
As a result, a very few new industrial units can begin operations, he says.
Ficci's former boss suggests the government reduce complexities in the bidding process for gas fields and power generation, so that power-generating companies can begin production as soon as possible.
"Complicated bidding processes are major obstacles to development of the energy sector."
The first and foremost negative effect of shortfalls in energy is underutilised production capacities, Bhuiyan points out.
The cost of production rises in case of underutilised capacities, for which companies lose out competitiveness, he says.
According to him, small and medium industries are directly affected by energy shortfalls, as their capital bases are not strong enough to install high-powered captive power plants and tackle massive losses.
The government can give diesel subsidies to the small and medium scale industries, so that they can survive in both domestic and international markets, he says.
Waliur Rahman Bhuiyan also points his finger at the present large gap of around 1,400 megawatt electricity, as official data show power generation of 3,800 MW at peak hours against its demand for around 5,200 MW.
It is imperative on government's part to take immediate steps to bridge such a gap and ensure adequate and uninterrupted power, he says.
"While we are aware of the government's constraints in this regard, we cannot but say that administrative bottlenecks and indecision stand in the way of various power development projects since long."
The government should take steps to improve the gas connection for at least the next 20 years, he says.
It is apparent that power generation in Bangladesh is heavily geared towards gas field turbines, with inefficiencies in the system, which gives rise to the mismatch in demand and supply.
At present, 60 percent of the country's population has no access to electricity, with a growing population making the problem acute, Bhuiyan adds.
Natural gas is responsible for some 90 percent of power generation here.
However, the country has abundant coal reserves, which to date have not been exploited.
The estimated two and a half billion tonnes of coal reserves is equivalent to about 65 TCF gas, with Phulbari and Barapukuria's reserves at about one billion tonnes, or 26 TCF, of gas.
If coal is introduced into the energy mix, it could free gas for more value added industries, such as fertilisers.

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