May 19, 2013 | 05:09 PM (BD Time)
19 May, 2013 Sunday
Fate of 13 power plants hangs in balance
. Anisul Islam Noor
The government's 13 big power plants are facing uncernaity in implementation within its tenure due to lack of necessary investment.
These power plants targeted generation of around 3210 megawatt (MW) of electricity in the next one and half years.
Power Development Board (PDB) undertook these big power projects in line with the Power Sector Master Plan-2010.But most of these projects could not start its initial activities because of inadequacy of funds.
Besides, under a joint venture and private sector investment, the government took up five larger power projects to generate 3,700 MW electricity, but the fate of those also hangs in the balance, according to the Power Division. An official said the government needs at least US $ 17 billion to implement its plan to generate 13,000MW electricity during its tenure.
The official pointed out: "Fourteen independent power plants are not getting loans, as banks suffer from liquidity crisis and the project proposals are not in order."
The Power Division is not getting the necessary Tk. 1,600-crore support from the Bangladesh Infrastructure Finance Fund (BIFF), he added.
The government formed BIFF two years ago to finance top priority projects, including power,in the infrastructure sector.
The struggling power generation schemes include Siddhirganj 450 MW, Bheramara 360 MW, Sikalbaha 225MW, Bhola 225MW and Barapukuria 250MW plants.
Sylhet 150MW, Chandpur 150 MW, Sirajganj 150MW and Khulna 150 MW plants had already missed their deadlines for starting production, which adds to their installation costs, the Power Division official further said.
In 2001, the Executive Committee of the National Economic Council (ECNEC) approved the Sylhet 150MW power project at a cost of about Tk350 crore, which has now escalated to Tk 879 crore, due to the delay. Similarly, the Chandpur 150MW project was also approved by the ECNEC in the same year, but its project cost has soared up to Tk1,201 crore. Another large ECNEC approved project, the Bheramara 360MW plant, has also faced a big blow as its Japanese financier is now unwilling to disburse the committed loan, due to inadequate gas supply to the proposed plant site.
"To overcome the situation, the finance ministry and the Power Division last month sat with the Prime Minister. The Bangladesh Bank governor, who was also there, apprised the PM that the projects would not get any foreign finance, as the project proposals were faulty and the local banks unwilling to provide loan to these projects," a finance ministry official said, preferring anonymity.
To encourage private sector investment initiatives, the Power Division, awarded a contract to Summit Power two years back for an independent power producer (IPP), and its consortium, for building each of the 341 megawatt, gas-based power stations at Bibiyana-1, Bibiyana-2, and Meghnaghat-3.
In December last year, the Power Division also awarded contracts to two private firms for installing 1100 megawatt coal-based power stations.
According to sources, the Summit Group, the country's single largest power producer in the private sector, is also facing serious fund crunch as the World Bank has refused to offer performance risk guarantee (PRG) against its three IPP projects.
As a result, the fate of the three IPP projects and the government's plan to add 2,000 megawatt more electricity to the national grid by 2014 becomes uncertain.
"We won't create any obstruction to the Bibiyana power project, if there is any other investor willing to implement the project as per schedule," Aziz Khan, chairman of the Summit Group, told The New Nation.
The Power Division is yet to handover the proposed land to them to install the power plant, he complained.
According to estimates by the ministry of power, expected fund requirements for the generation, transmission and distribution sectors stand at about $ 18 billion, $ 2 billion and $ 4 billion respectively.
However, to tackle the fund crisis in the power sector, the government has recently formed an apex committee headed by the finance minister.
"The government is busy installing small and costly power plants, instead of base-load and long-lasting planned stations, at the last leg of its tenure, causing extra pressure on the country's fiscal management," Dr Ijaz Hossain, a BUET professor, said.
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