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The deal that is an ‘absolute gouge’ for Bangladesh

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After what Md Shahriar Alam, Bangladesh’s state minister for foreign affairs, said to the India’s news outlet ABP Live Friday, it is clear that the Awami League government has no problem with the conditions of the Bangladesh Power Development Board’s power purchase deal with India’s Adani Power Ltd. There will not be any revision of the terms and conditions, let alone scrapping of the deal. It does not matter for the government that the conditions of the deal are against the interest of Bangladesh as has been pointed out by experts in the field in the local and international media. For Bangladesh, the state minister said, there is no ‘issue’ with the $4.5 billion project which is, to use his word, ‘moving’. If everything proceeds according to plan, power supply from Godda plant at Jharkhand will start on March 26, the Independence Day of Bangladesh.
Much has been talked about the deal’s conditions which are opaque, unequal and discriminatory for Bangladesh. The deal is “an absolute gouge.” That was the expression Tim Buckley, a Sydney-based energy finance analyst, used while talking to the Washington Post on the unfairness Bangladesh receives in the deal between the BPDB and Adani Power Ltd that was signed in 2017. To him, Bangladesh will have to pay 33 percent more per kilowatt-hour than the publicly disclosed cost of running Bangladesh’s domestic coal-fired plant.
According to the deal, after the plant comes online, Bangladesh must pay Adani about $450 million a year in capacity and maintenance charges regardless of whether it generates any electricity or not. The Bangladesh government went for the deal despite the fact that it now already has, according to Bangladesh government figures, 40 percent more power generation capacity than peak demand.
None of the deal’s conditions can be considered a win for Bangladesh. The coal used for Adani’s plant will come from disputed mines owned by Adani in Indonesia and Australia and by Adani ships, which will be unloaded at Adani-owned ports and transport will be done by Adani owned railways. Again the generated electricity will be transported in the transmission line built by Adani. Bangladesh will have to bear all the cost which is unprecedented in the experience of the global power sector, says the energy expert.
As a result, electricity supplied through this project will be charged at an unusually high rate compared to electricity from any other supplier in the country. Moreover, if Bangladesh does not buy one third of power, 34 percent, from the Godda’s 1600-megawatt plant, Bangladesh will have to pay the price and carrying cost of coal as well as the production cost. It has also been reported in the media that while signing the deal Adani Power Limited concealed the fact from Bangladesh that India exempted almost all import taxes for the Godda power plant in a manipulative bid to get a higher capacity charge in breach of its power purchase agreement.
A few days ago, a team of Adani officials visited Bangladesh and discussed matters but as to the terms and conditions everything remained unchanged that has generated a flurry of protests among a cross section of people. Bangladesh Environment Network (BEN) called for the cancellation of the power purchase agreement demanding identification of the “vested groups” who pushed for this deal at the cost of national interests. Before, the TIB also called for scrapping of the deal. Opposition political parties are also voicing their strong concerns against it.
However, why did the Bangladesh government go for buying electricity from Adani Power Limited with such an exorbitant price in the first place? Some commentators say, and correctly at that, that the deal is less to do with the purchasing power at a fair price than bribing the Indian government to keep Sheikh Hasina in power. The deal was signed in 2017, a year before the 2018 general elections in Bangladesh and the government received the dividend for it from India. Almost a year away from the next general election, it is hard for the government to make a fair bargain with India.
The deal is a national shame for us. Even in India, the Congress asked whether Narendra Modi misused India’s foreign policy relations with Bangladesh to enrich a corporate crony of India’s prime minister like Gautam Adani. As citizens of a sovereign nation that came to existence through spilling of blood in 1971, we feel utter shame that our politicians can ink this anti-people deal just to remain in power.

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