Power play
THE other day, a prominent business leader was on a TV talk show, one of the many that private satellite channels telecast in large numbers. He was projecting a doomsday scenario of the government power sector.
In his opinion, the machinery in government sector aging plants is nothing but junk and should be replaced, or else a disaster is awaiting our power sector. As far as I could gather, there are some aging plants in all power sectors.
As for the machinery, they are replaced as a matter of routine maintenance of plants. What is worrying is the shortfall in power generation that runs to approximately 1200 MW. I later learnt that the business leader is a budding power sector entrepreneur.
Over the years, Bangladesh has been generating less electricity than the demand. The result is a crisis that afflicts national life. There is a policy, but it rarely delivers according to plan. There are snags of many kinds -- incompetence and frailty of the minister, venal political agenda of the party in power, bureaucratic procrastination, snares of business groups and high-browed mantras of international donors etc.
Naturally, the power sector plods. The arithmetic has always been disappointing. In 2008, Bangladesh's power sector had an installed capacity of about 5500 MW. But the electricity generated is on average 3700 MW. The demand for power is 5000 MW approximately. It grows by roundabout 30%. Had it not been for the captive generation of around 1000 to 1500 MW, pressure on the national grid would have mounted.
Power sector officials point out a number of factors responsible for this shortfall. As a matter of routine work, some plants are out of operation for overhauling and for balancing and modernisation. Indeed, there are plants that have been out of operation for a long time, albeit their numbers are few.
Insufficient supply of gas is another factor that accounts for a shortfall of 300 to 500 MW.
Whatever be the factor, our governments have always responded to the crisis with knee-jerk reactions. The government in power during 1996-2001 responded to the power crisis by enlisting the support of Independent Power Producers in setting up barge-mounted power plants for the expeditious improvement of the worsening situation.
The deal that set up the barge-mounted power plant in Goalpara, Khulna added 110 MW to the national grid but, at the same time, it placed a big burden on the government sector power under the power purchase agreement.
Half of the payment is to be made in convertible foreign currency and the other half, for the importation of furnace oil, is to be adjusted against international price of oil. The equation is so heavily loaded in favour of the owning company that per unit cost of electricity often goes over Tk.6.
Besides, there is a loss of revenue because imported furnace oil for the plant was made duty free. The only consolation was that it saw the birth of indigenous entrepreneurs in private sector power generation.
The power situation did not improve when the next government came to power. The prime minister kept the portfolio under her. The new state minister for power made it clear from the beginning what he stood for. He castigated the rationality of setting up small power plants as wasteful.
However, he could not set up a single large power plant in five years. Besides, the increase in generating capacity was also not significant. Only 300 MW, approximately, was added to the national grid.
Much was heard about a 450 MW gas-based power plant at Sirajganj. The process exposed a rift within the government and showed that the ministers were out of touch with the prime minister. The single bid tender opened Pandora's Box -- that there were questionable motives behind the proposal.
The ministerial purchase committee duly approved it, but it got stuck in the prime minister's secretariat. The proposal was sent back, questioning the lone bid offer, with an order to institute an enquiry commission to look into it for possible wrong-doing.
If the lone bid violated transparency, why was it opened in the first place? The redeeming part of it was that it had the most attractive offer of Tk. 2.3275 per unit of electricity. The plant was to be set up on the basis of owning ratio of 60:40 -- 60% owned by the bidder and 40% by PDB for the land provided by it. Later, the Sirajganj power plant project was to become an ill-fated proposal. This is what happens to a good project when power play acts as the arbiter.
Much has been said about small power plants. Small power plants are less efficient and less cost effective than bigger power plants. But it must be said that small power plants are not without their merits.
Small power plants can be commissioned within a short period. For localised development or the development of a particular area, it is useful. Besides, the fund can be raised locally, enabling indigenous entrepreneurs to participate in the power sector.
Indeed, it has seen the rise of a number of indigenous private power producers. However, it is not practical to believe that small power plants alone are a solution to the power problems of Bangladesh. It will involve the setting up of an unbelievably large number of small power plants all over the country for something that can be done by a few large power plants at the load centres.
Since small power plants are not dependent on foreign donors, they attract political power peddlers to seize on the opportunity. In fact, the last government indulged in this kind of power play when it brazenly distributed 20 MW power plant contracts like it was distributing largesse. The folly was realised and the contracts were cancelled.
Power plants in the scenario of Bangladesh are like big game hunting. The catch is big and there is grandeur about it. Ayub Khan was all about grandeur, and his government set up the Kaptai Hydroelectric dam for 230 MW of electricity.
Large tracts of wooded land were lost in Kaptai Lake, and it gave rise to long drawn out tribal insurgency. The present caretaker government is actively pursuing rental power plants. Like small power plants, these alone are not the solution to the power problem.
I understand that the power ministry always had a plan, but its implementation had to pay obeisance to political expediency. The power problem is carried on from one government to another. Our fervent prayers will be for our power sector to be run professionally, not only in planning but also in implementation.
Comments