Private power plant owners were at their final round of lobbying with the government to bag 'unsolicited' contracts for setting up oil-fired power plants, officials said.
The plants are expected to come online before the next summer and supply electricity at higher cost.
Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) sent Wednesday a proposal to the Prime Minister's Office (PMO) for selecting nine sponsors to generate some 1,800 megawatts (MW) of electricity.
The plants would run on diesel and furnace oil, said a senior official at the Power Division.
Sources said the selected owners were busy trying to persuade the government high-ups to ensure that their names are not dropped at the final stage.
Some more private power plant owners were also in a 'mad race' to bag contracts, by-passing the competitive tender process.
Before the next general election, the government has a plan to generate around 3,000mw of additional electricity by March 2018. The Power Division in a surprise move on July 10 decided to bring online around 3,400mw capacity oil-fired power plants by then.
Of the plants, 800-1,200mw capacity would be of diesel-fired with five-year tenure and up to 2,200mw capacity furnace oil-fired plants with 15 year-tenure, a Power Division official said.
All the oil-fired power plants, excepting 1,000mw capacity ones, would be awarded on the basis of 'unsolicited' offers under the Speedy Supply of Power and Energy (Special Provision) Act 2010.
The law has a provision of immunity to those involved with the quick-fix remedies.
The 1,000mw capacity furnace oil-fired plants would, however, be awarded through competitive tendering process, said the official.
He said the government is set to allow the private entrepreneurs for duty-free import of furnace oil to run their power plants with 9.0 per cent service charge along with import costs as an incentive, keeping the capacity payments provision for the new plants, said the official.
Among the proposed nine power plants, three would be of diesel-fired plants and six would be of furnace oil-fired ones.
Of the diesel-fired plants, Bangla Trac would build 300MW rental plant at Daudkandi, Aggreko will build a 200mw capacity plant at Noapara and APR a 300mw plant at Keraniganj.
State-run Bangladesh Power Development Board (BPDB) is set to purchase electricity at the levelised tariff rate ranging from US cents 25.0039 to 25.417 from the diesel-fired plants, said officials
The furnace oil-fired plants include Summit Group's 300MW plant at Kodda, Confidence Power's 113mw plant at Bagura, Midland's 150mw plant at Asuganj, Orion's 100mw plant in Khulna, Acorn's 100mw plant at Julda, and Desh Energy's 200mw plant at Chandpur.
The BPDB is set to purchase electricity at the levelised tariff rate ranging from US cents 10.50 to 10.65 from the furnace-oil fired plants, said the officials. Energy adviser of the Consumers' Association of Bangladesh (CAB) Prof M Shamsul Alam said the consequence of the too many expensive oil-fired power plants would be 'disastrous' for the country as it might act as, what he said, a mean for continuous hike in electricity tariff.
It seems that the government is 'ignorant' about it and relevant professionals kept them aside of advising the government over its impact, he said.
Prof Alam pointed out that the initial plan of 2009 to install such oil-fired power plants as a 'short-term' solution and retire them after initial expiry deadlines and subsequent reduction in tariffs was a 'pro-people' decision.
But continued extension of the 'expensive' rental-and quick-rental power plants with capacity-payment provisions and allowing more such plants were going the way of dishonest business people, he said. Prof Ijaz Hossain of Bangladesh University of Engineering and Technology (BUET) termed the government as a 'total failure'.
It was unfortunate that the government was still in 'crisis-management' mood for power sector although about to complete two consecutive tenures in office.
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Source: The Financial Express