Quick Rental Power Plant project failing in Bangladesh

Establishment and timely commencing production of the major segments of the power plant, contracted to be established on "Quick Rental" basis in Bangladesh is failing gradually, thus not only causing huge amount of financial loss to national exchequer but also increased sufferings of the citizen of the country. Up to April, 2011 all the 14 Quick Rental Power Plant [QRPP] projects, which were undertaken by the ruling Bangladesh Awami League government on a "fast-track" basis to generate electricity to meet the current acute power crisis in the country, have miserably failed to commence production. According to contract, these projects were scheduled to start production latest by April 2011.

The policy of letting private companies establish QRPP was greatly criticized by experts in the country. Many said, this was a mere "money-making" project of some of the influential figures in the government and the ruling party. Awami League government adopted a "Crash Program" in October 2009 to set up power generation plants in next five years having total capacity of 7,000 MW. So far, the government has signed contracts for 33 power plants in the public and private sectors. Among those, most are costly quick rental and rental power plants. The private sector sponsors were supposed to install these plants from which the government would purchase electricity at a very exorbitant rate of between TK 9.75 [US$ 0.13] and TK 22 [US$ 0.29] per unit.

Power Development Board [PDB] said, the rental, quick rental and peaking plants were undertaken on a fast-track basis to address the nagging power crisis. The QRPP projects were supposed to add about 1,000 MW of electricity to the national grid. These QRPP projects are Meghnaghat 100 MW, Khulna 115 MW, Meghnaghat 100 MW, Ghorasal 78.5 MW, Ashuganj 80 MW [gas-generated], Keraniganj 100 MW, Ashuganj 53 MW, Noapara 40 MW, Amnura 50 MW [Chapainawabganj district], Juldha 100 MW, Siddhirganj 100 MW and Katakhali 50 MW.

Energy ministry sources in Bangladesh claimed that, QRPP are considered to be quickest method of meeting the growing demands of electricity in the country, and end consumers will pay the same or a bit less for their electricity.

Opposing the idea of QRPP, experts said that mostly second-hand equipments and machinery are used in such plants, which will be less efficient and the tariff will ultimately rise. They argue that the government would be better off spending money on upgrading the existing power stations.

Bangladesh's energy infrastructure is quite small, insufficient and poorly managed. The per capita energy consumption in Bangladesh is one of the lowest [136 kWH] in the world. Noncommercial energy sources, such as wood, animal wastes, and crop residues, are estimated to account for over half of the country's energy consumption. Bangladesh has small reserves of oil and coal, but very large natural gas resources. Commercial energy consumption is mostly natural gas [around 66 percent], followed by oil, hydropower and coal.

Electricity is the major source of power for country's most of the economic activities. Bangladesh's installed electric generation capacity was 4.7 GW in 2009; only three-fourth of which is considered to be 'available'. Only 40 percent of the population has access to electricity with a per capita availability of 136 kWh per annum. Problems in the Bangladesh's electric power sector include corruption in administration, high system losses, and delays in completion of new plants, low plant efficiencies, erratic power supply, electricity theft, blackouts, and shortages of funds for power plant maintenance. Overall, the country's generation plants have been unable to meet system demand over the past decade.

In generating and distributing electricity, the failure to adequately manage the load leads to extensive load shedding which results in severe disruption in the industrial production and other economic activities. A recent survey reveals that power outages result in a loss of industrial output worth US$1 billion a year which reduces the GDP growth by about half a percentage point in Bangladesh. A major hurdle in efficiently delivering power is caused by the inefficient distribution system. It is estimated that the total transmission and distribution losses in Bangladesh amount to one-third of the total generation, the value of which is equal to US$ 247 million per year. Bangladesh has 15 MW solar energy capacities through rural households and 1.9 MW wind power in Kutubdia and Feni. Bangladesh has planned to produce 5 percent of total power generation by 2015 & 10 percent by 2020 from renewable energy sources like air, waste and solar energy.

The Ministry of Power and Energy has been mobilizing TK. 40,000 crore [US$ 5.88 billion] to generate 5,000 MW of electricity to reduce load shedding into a tolerable level within next three years during the term of the present government, which came in power in January 2009. Under this plan, Power Development Board [PDB] was supposed to generate 500MW gas-generated electricity between July-December 2009. The PDB was also supposed to hire furnace-oil based 1000MW electricity from private sector during January-June 2010. According to this plan, the government was also supposed to install furnace-oil based 800MW power plant. But so far, most of such five-year plans have miserably failed.

Meanwhile the government decided to establish a 1000MW Nuclear based power plant with Russian technical assistance at Rooppur. Bangladesh government already has signed a framework agreement with Russia in this regard. Commenting on possible risk of radiation leaking from the damaged nuclear plant as it happened in Japan, Bangladeshi Prime Minister Sheikh Hasina said, "those power plants were constructed 40 years back, whereas present security systems at the nuclear power plants have improved significantly."

Bangladesh government aspires to complete the first 1000MW nuclear based power station at Rooppur by 2015 while another plant is planned to be established at the same site with same production capacity by 2018.

Ministry sources indicate that, Russians though have submitted proposal for the establishment of nuclear based power station in Bangladesh, it has not yet submitted the details on how Bangladesh would dispose off the nuclear waste that would be released from the plant. The source also indicate that, Bangladesh government was also negotiating with Iran for their assistance in establishing both or at least one of the nuclear based power plants in the country. Delegation from Iran has already made a number of trips to Bangladesh to discuss and negotiate the project with the ruling party tops.

Experts have already issued warning of potential hazards, if Bangladesh concludes the deal with Russia, without properly evaluating the risk hazards. Sources within the energy ministry, on condition of anonymity told Weekly Blitz that, decisions related to power plants are being exclusively dictated and finalized by Prime Minister's advisor Dr. Tawfiq-e-Elahi, who, according to energy experts, greatly lacks in proper knowledge and experience on such nuclear power plants. Moreover, there are serious allegation of manipulation and corruption by Dr. Tawfiq in finalizing power plant deals. Many opine that, he is solely responsible for the current failures of establishment of QRPP by private and public companies.

Meanwhile, a local company named Quantum Power Limited [an enterprise of OTOBI Limited] has been fined TK 200 crore [US$ 25 million] for their failure in commencing production of a 105MW plant at Bheramara district in Bangladesh. Quantum Power Limited got this contract against QEPP project. The authorities concerned though have collected an amount of TK. 6.4 million [US$ 90,000] only as penalty money out of the total amount of TK 200 crore [US$ 25 million], while, OTOBI is actively pursing with various important figures in the government including the energy advisor in averting payment of the remaining amount of penalty.

QRPP projects have already come totally messed up as the policymakers in the energy ministry, instead of looking into national interest were busier in making evil cash. A large number of projects were also illegally awarded to a company owned by two of the influential and controversial ministers in the government.

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Quick Rental Power Plant project failing in Bangladesh

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