INDO-BANGLA POWER PROJECT
BIFPC presses for tax waiver on profitManjurul Ahsan
Bangladesh-India Friendship Power Company is mounting pressure on the government for getting a tax waiver on profit, although the provision was not included in the draft power sales/purchase agreement made between the BIFPC and the Power Development Board, officials said.
The Power Division has already asked the National Board of Revenue for waiving tax on profit to be made by the joint-venture company from sales of electricity, although there is no such precedence, the officials said.
‘The NBR turned down the request. But the Power Division again sent a letter requesting the revenue board for granting the waiver,’ a Power Division official told New Age.
Earlier in July 2012, the state-run PDB decided not to realise the performance guarantee and liquidated damages from the joint-venture company formed by the PDB itself and Indian National Thermal Power Corporation with 50:50 stakes.
There is a provision in the power purchase agreement by way of which the power board realises a specific amount of money in liquidated damages from power-producing companies for failure in fulfilling a number of conditions specified in the agreement.
A power producer in Bangladesh has to come up with a certain amount of money as performance guarantee before the PDB signs a purchase agreement with it.
The PDB also agreed to the NTPC’s demand that all liabilities of the joint venture would lie with the respective governments.
The power board plans to buy electricity for 25 years from the proposed 1,320 megawatt coal-fired power plant to be set up by the JV company at Rampal in Bagerhat near the Sundarban.
Besides, the NTPC – the Indian part of the joint venture – has been pursuing to employ a consultant for preparing a tender document to engage an engineering, procurement, and construction contractor for installing the power plant, a PDB official said.
But, the power board official said the Bangladeshi part in the JV wanted that PDB and NTPC experts should draft the tender document to minimise the cost.
The disputes are scheduled to be discussed in the first board meeting of BIFPC in Dhaka slated for January 29, the official said.
Besides, the joint working group and joint steering committee of Bangladesh-India bilateral cooperation in power sector will meet in Dhaka on January 30 and 31 respectively. Indian power division secretary is expected to lead a high-profile delegation in the meetings, a PDB official said.
The joint-venture company is now preparing to float a tender for awarding the EPC contract for installation of the $1.5 billion power plant, before concluding the power sales deal.
Bangladesh signed an agreement with India in April 2010 to build the power plant through a joint-venture initiative. The plant will run on imported coal.
Local people, green activists, and civil society members are protesting against the proposed power project, claiming that it would destroy the Sundarban.
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