Plant to renew rental plant contract not acceptable
THE prime minister’s approval of a proposal by the Power Division for renewal of the contracts that enabled the Power Development Board to buy electricity from ‘efficient’ rental plants until 2020 does not augur well for either the economy or energy security. As New Age reported on Wednesday, the approval given last week will also allow the owners to get rental even when the PDB does not buy power from them. As a power division official pointed out, although the rental power suppliers reportedly recovered their investment during the first contract period ranging from three to five years, they have demanded ‘unchanged price of electricity’ for the renewed period.
It may be pertinent to recall that the government introduced at least 20 expensive liquid fuel oil-run rental plants mostly owned by ruling party men between August 2010 and December 2011 and signed contracts with their owners to buy power at Tk 22 per unit, while the average generation cost of every unit of electricity at the state-run plants was just Tk 2.62. However, although the government opted for such plants in the name of quick solution to power outage, they miserably failed to address the woes at least in an effective manner. To add to the woes, in an attempt to cope with the rising subsidies in the power and energy sector due to the rental plants, the government increased power tariffs, bulk and retail, on more occasions than one in the past three years. Subsequently, in the face of enormous public criticisms against the rental options, key functionaries of the government pledged to start replacing such plants by base-load power plants run on cheaper fuels in 2013. Conspicuously, the government has failed to deliver on the pledge thus far. Thus, one cannot rule out the possibility that the incumbents may be more intent on serving the interests of rental plants owners than mitigating public woes.
Regardless of the reasons behind the approval in question, the government immediately needs to review it. One cannot say for sure that allowing private owners to dominate the power sector would not embolden them even to hold the nation hostage at any moment they think suitable to have the government comply with their unjust demand like the one at hand.
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