Coal power project with India goes slow
Bangladesh and India's move for a $1.5 billion joint venture coal-fired power plant in Khulna has somewhat slowed down due to various hitches, and a feasibility study has scaled up cost of civil construction at the project site due to poor soil condition.
Despite this, Power Development Board hopes to sign a joint venture agreement (JVA) with its Indian counterpart National Thermal Power Company (NTPC) to set up the 1,320 megawatt power plant during Prime Minister Manmohan Singh's visit to Bangladesh next month.
The JVA was supposed to be signed almost a year back.
But it did not take place due to a host of problems ranging from differences of opinion on how the two countries would manage the power project to how it would be financed. Besides, the feasibility report on the project prepared by the NTPC was submitted to the authorities many months behind schedule.
The massive plant will be set up on an 1,800-acre site close to Chalna. Land for the site has been acquired.
“We have now sorted out all differences with our Indian counterpart,” said a top PDB official. “And we may be able to sign the joint venture agreement next month.”
This however will not be enough for launching the project immediately.
The PDB official said the project will use imported high quality coal. But the source of this coal, which may be Indonesia or Australia, has not been decided.
“With help from the World Bank, we will appoint a consultant to help us find a source, and secure a deal with it,” he added.
Another issue is the Mongla Port Authority's objection to allowing the use of its jetty to unload imported coal, saying they do not have the required infrastructure. The issue has not been resolved as yet.
The official noted that Bangladesh and India will equally share up to 30 percent equity of this mega project. The remaining equity, which may be equivalent to $ 1.2 billion, will be taken as bank loan with help from the NTPC.
“The ownership of this company will be 50-50 for Bangladesh and India. There will be a six-member management committee with three members each from the two countries. The managing director and chairman will represent the two countries in rotation,” the official said.
Coal-fired power is considered one of the cheapest power in the world, although it is the worst polluter in power generation. This is why Bangladesh intends to build the plant using super-critical technology to keep the level of pollution as low as possible.
The JVA will be signed as a follow-up of the memorandum of understanding signed between the PDB and the NTPC on August 31 last year in Delhi.
Construction of the plant will be completed within around three years of awarding the contact for it.