Private producers slowing down power generation in public sector

The New Nation reported on Tuesday that Bangladesh Power Development Board (BPDB) has incurred a loss of Tk 6,200 crore in fiscal 2014-15 due to buying electricity from the rental and quick rental power plants at high cost and selling it at lower prices. It is contrary to common business practice but the BPDB’s dependence on private power plants has already turned it into a structural problem at the expense of the power sector development by the government. Meanwhile, the annual loss is soaking up the government’s subsidy to the power sector raising question how long will it continue at the cost of taxpayers’ money. In fact electricity users were eligible for government subsidized prices but they have been made to pay the higher buying prices now through ever growing electricity bills. The country’s private power producers now include all politically powerful people in the government and business who enjoy subsidized fuel cost. They have also won the contracts through unsolicited bids and got their renewal again to continue to make enormous profits from contract selling of electricity to the government. BPDB’s estimates suggest private sector run power plants are now producing half of the 6,300 MW electricity daily showing that the share of government run power plants is gradually shrinking while its dependence on private producers is rising. It is true that the government had initially justified the private power plants to increase power generation in the short run. Meanwhile, it will set up big power plants which produce electricity at low cost to keep the nation’s power bills at the low. But there is hardly any progress in implementing big power plants and many hold powerful people within the government responsible for delaying the big projects so that private power producers can continue to earn handsome income from such contracts.  BPDB’s figure shows that during 2014-15 fiscal, it spent about Tk 16,300 crore to buy 2,200 crore units of electricity from private sector while it earned Tk 10,200 crore by selling it to users. The state compensated the loss. But the government at the same time is also extending the private power contracts making the nation increasingly dependent on their supply.  This is the structural problem hurting the power sector and its users at the worst. Factors like electricity theft, faulty billing and other inefficiency in power distribution and marketing are no doubt taking a big toll to add to losses but the high cost power plants in the private sector is causing all the more drainage to public fund and it appears that the government is patronizing them rather trying to get rid of them. Any government that bothers about common people can’t allow it to continue. People believe that there must be an end to it to give attention to quick implementation of big public sector power projects.