29pc cut in power sector allocation
In the revised Annual Development Programme (ADP) of the current fiscal year the government is going to cut the allocation for the power sector by 29 percent, as many projects in the sector could not progress as expected.
Due to the same reason, allocations for many other important sectors like health and transport will also be slashed. Allocations for agriculture and water resources sectors will however be increased in the revised ADP.
The original allocation for the power sector in the current fiscal year was Tk 3,574 crore which will be brought down to Tk 2,528 crore.
Planning ministry sources said in the first six months of this fiscal year the Power Division could spend only 22 percent of its total allocation.
In the original ADP, 11 power generation projects were approved for implementation, comprising setting up of new plants and rehabilitating some old ones.
Tender processes for only two new plants have been completed so far, while the processes for the rest have started but yet to get to the final stages, although those were supposed to be completed within 2009.
The new power plants for which the tender processes are yet to be finished are Shikalbaha 150 megawatt plant, Khulna 150 MW plant, Sirajganj 150 MW gas turbine power plant, two plants of 120 MW capacity each in Shiddhirganj, and Haripur 360 MW combined cycle power plant.
Power Division sources said the tender processes for these plants are far from the final stages.
The resulting allocation cut in the power sector is about to come despite the government's earlier prioritisation of the sector in the original ADP document.
The total amount of allocations in the revised ADP will be cut by Tk 2,000 crore bringing it down to Tk 28,500 crore. The local component will be slashed by 2.57 percent bringing it down to Tk 17,200 crore.
Project aid will be brought down to Tk 11,300 crore, slashing the original projection by 12 percent.
The planning ministry will soon place the draft of the revised ADP to the National Economic Council (NEC) for final approval, the ministry sources said.
In the draft revised ADP the allocation for the health ministry has been cut by 7.82 percent bringing it down to Tk 2,981 crore while the allocation for transport sector has been cut by 22 percent bringing it down to Tk 3,650 crore.
Allocation for the government's physical infrastructure building and water supply has also been slashed by 21 percent bringing it down to Tk 2,842 crore.
Planning ministry officials said several ministries failed to complete tender processes for different development projects on schedule, resulting in a cut back in the disbursement of pledged foreign assistance within the current fiscal year, which in turn is causing the cutbacks in the revised ADP.
However, many ministries will see increases in their allocations as their project implementation rates were high.
Energy and Mineral Resources Division spent 74 percent of its current allocation in the first six months of this fiscal year, as a result the division's allocation will be increased by 53 percent bringing it up to Tk 1,079 crore.
Allocation for the agriculture ministry will be Tk 1,798 crore with an increase of 5.95 percent.
The water resources ministry will also get an increased allocation of Tk 1,085 crore after a 22 percent hike.