Special Report :
In a significant legal development, the High Court of Bangladesh on Monday questioned the legality of sections of the Power and Energy Quick Supply (Special Power) Act-2010, which have long shielded rental and quick rental power plants from legal scrutiny.
The challenge was brought forward by prominent lawyer Dr. Shahdeen Malik, along with his junior colleague Tayeb-Ul-Islam Showrov, who filed a writ petition arguing that these provisions were unconstitutional and harmful to the public interest.
The High Court bench, comprising Justice Farah Mahbub and Justice AKM Rabiul Hassan, issued a rule asking why the provisions that protect the establishment and operations of these power plants from any judicial questioning should not be declared illegal.
The court has directed several government authorities, including the secretaries of the law, finance, and power ministries, and the chairman of the Bangladesh Power Development Board, to respond within four weeks.
Dr. Shahdeen Malik, who argued the case, contended that Sections 6(2) and 9 of the 2010 Act allow significant financial decisions to bypass judicial oversight, leading to widespread corruption and heavy financial losses for the public.
The Quick Rental Power Plant (QRPP) program, at the heart of this controversy, was initiated by the kleptocratic regime of Sheikh Hasina, who was overthrown on August 5, 2024, following a mass uprising led by students.
The Hasina government, during its 15-year tenure, heavily relied on the QRPP model as a quick fix to the nation’s energy crisis.
However, the program became synonymous with corruption, inefficiency, and financial mismanagement, culminating in today’s legal challenges.
The Controversial Provisions o Section 6(2) permits the power and energy ministry to bypass standard bureaucratic procedures when approving projects.
This allows the energy minister to present procurement proposals directly to the purchase committee, effectively fast-tracking decisions without sufficient scrutiny.
o Section 9 grants blanket indemnity to government officials and others involved in implementing the Act.
This provision prevents any legal actions from being taken against decisions made in good faith under the Act, effectively barring any legal challenges to actions or directives issued under this law.
The QRPP model was introduced in 2010 as a temporary measure to address the country’s acute power shortages.
While it initially helped mitigate the crisis, the model has since become a source of controversy due to its high costs and allegations of corruption.
High Costs and Financial Burden: The QRPP model has proven to be an expensive solution.
For instance, electricity from these plants costs significantly more than from other sources, with per-unit prices reaching Tk 16.40. The government’s continued reliance on these expensive plants has driven up electricity prices for consumers, straining household budgets and adding to the government’s financial woes.
Capacity Charges: Over the past decade, the government has paid more than Tk 47,262 crore in capacity charges to rental power companies.
These charges were incurred even when the plants were not producing electricity, contributing to significant financial losses.
The indemnity provided by Section 9 has prevented any legal challenges to these payments, further exacerbating the problem.
Allegations of Corruption: The lack of transparency and accountability in the QRPP model has fueled widespread allegations of corruption.
The legal protections offered by the Act have allowed questionable financial practices to persist, undermining public trust in the government’s management of the power sector.
Broader Economic Implications: The financial strain imposed by the QRPP model has had ripple effects throughout the economy.
To cover the costs of these plants, the government has raised electricity prices, which has contributed to inflation and increased the cost of living.
Additionally, the financial burden on the government has limited its ability to invest in more sustainable and cost-effective energy solutions.
In March 2022, the government renewed contracts for five furnace oil-based rental power plants for an additional two years.
These renewals were made under a “no take, no pay” mode of operation, where the government is not obligated to pay if no electricity is purchased from these plants.
Despite this clause, the renewals have drawn criticism due to the overall surplus in power generation capacity, which makes the continued operation of these expensive rental plants questionable.
The power plants in question-operated by companies such as Summit, Orion, and United groups-had previously gone out of operation after their initial ten-year terms.
Despite the “no take, no pay” condition, the renewal of these contracts raises concerns about the necessity of maintaining these expensive power sources when nearly half of the country’s installed capacity remains unused.
The renewal agreements require a total outlay of Tk 5020.9 crore, further straining government finances.
Finance Minister AHM Mustafa Kamal defended the renewals, stating that the need for these plants would diminish within two years.
However, critics argue that the decision to renew these contracts, even with the “no take, no pay” clause, reflects deeper issues within the QRPP model, particularly regarding transparency and the government’s long-term energy strategy.
The High Court’s ruling marks a pivotal moment in Bangladesh’s ongoing struggle to balance the urgent need for energy with the principles of transparency and fiscal responsibility.
As the legal process unfolds, there is growing public and expert pressure on the government to reconsider the QRPP model and seek more sustainable energy strategies that prioritize long-term economic stability.
