The cabinet committee on government purchase approved Monday the installation of three barge/skid mounted power plants in the private sector as an emergency measure to tide over the mounting power crisis, at least, partially.
The power plants having the total generation capacity of 150mega-watt (MW), according to the contracts to be signed between the Power Development Board (PDB) and the private operators, will sell electricity to the PDB for a period of 15 years.
Some ministers attending the Monday's meeting, according to sources, wanted the deals for a shorter duration since the PDB would have to incur a huge financial loss every year due to the mismatch between the procurement price and the selling price of power. But their suggestion was not taken into cognisance. Finance Minister M. Saifur Rahman presided over the meeting.
The PDB will have to count an estimated loss of Tk 450 million annually for next 15 years. The Board will be purchasing electricity from these plants at much higher rates than that of the existing ones.
"The proposed power plants - Shahjibazar 80MW, Fenchuganj 50 MW and Bogra 20 MW - are scheduled to start supplying electricity to the national grid within next six to eight months," State Minister of Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) Iqbal Hasan Mahmood told newsmen.
Installation of these power plants on rental basis by private sectors will, however, be the first of its kind in the country.
The state minister said these skid-mounted power plants will provide electricity for 15 years from their respective dates of starting supply to the national grid.
Power Division sources said with the Monday's approval by the purchase committee, at least, one out of three contingency measures planned by the Division earlier is going to be implemented. The two other measures relate to the purchase of power from captive power plants in the private sector and installation of small power plants (SPPs).
Of the approved power plants, Shahjibazar 80 MW and Bogra 20 MW power plants will be gas-fired, while Fenchuganj 50 MW plant will be run on either diesel or gas.
Under the agreed proposal, the state-owned Power Development Board (PDB) will purchase electricity at Tk 2.63 and Tk 3.16 per unit (1,000 kilo-watts) from Shahjibazar 80 MW and Bogra 20 MW power plants respectively.
For Fenchuganj 50 MW plant the purchase rate will be Tk 12.01 per unit if it runs on diesel. But the rate will be Tk 2.85 per unit if it runs on gas.
But the average rate of electricity purchase by the PDB from the existing power plants is now Tk 1.90 per unit.
The GBB Consortium and the Venture of United & Neptune will install the Shahjibazar 80 MW and the Bogra 20 MW power plants respectively.
"The electricity prices have been fixed considering a number of criteria including consumption of fuel by the companies and the distance of their proposed plants from the distribution area," Chairman of Bangladesh Power Development Board (BPDB) Rizwan Ahmed told the FE.
When asked whether the government would be able to ensure supply of gas to the proposed power plants within its tenure, Iqbal said: "It is important to ensure supply of gas to the people, no matter who remains in power."
He said the private operators of the proposed plants would have to pay fine if they fail to provide electricity within the timeframe as mentioned in their respective agreements.
Iqbal said the cabinet committee added a few conditions to the agreements between the PDB and the private operators of the power plants to protect the government interests.
Elaborating, he said the private operators will not increase tariffs even if the local currency depreciates against the US dollar. Besides, the government will have the option to buy electricity from the plants as per its requirement, he said.
Sources said these rental power plants are being installed following the directives from the Prime Minister's Office (PMO) to help reduce acute power crisis.
Currently, the country has the capacity to generate around 3000 mw of electricity against the demand of 4300 mw.