Not on the right track
INCREASING dependence on power generated by private companies is indeed a matter of grave concern. According to a report published in New Age on Monday, quoting from data available with the Power Development Board, private-sector power plants currently produce more than half of the electricity supplied to the national grid. While these companies generated 41.68 per cent of the total in 2009-10, its share crossed the 50 per cent mark in 2010-11 (about 50.24 per cent). In the past two fiscal years, the share of the private companies in power generation has been 52.93 per cent. It is worth mentioning here that the Awami League-led government’s mega plan on power generation envisages the share of private companies to go as high as 62 per cent by 2016. Not surprisingly, the incumbents have reportedly increased gas supply to different private-sector power plants by a significant margin in the past four years. Meanwhile, they have appeared rather not forthcoming in terms of setting up new plants in the public sector. As a result, power generation by private companies increased by 78 per cent, against just about 13 per cent by the public sector.
One need not be an expert to conclude that all this may have resulted from the deliberate attempt by the incumbents to allow private companies to dominate the power sector. One can refer, in this connection, to the fact that the government at present buys electricity from private companies at a higher rate, between Tk 1 and Tk 2 per unit, than the rate it has to pay for electricity generated by the public sector plants. The government continues to do so despite such steps having already resulted in the staggering increase in subsidies for the sector causing the economy to bleed profusely on the one hand and increase in power tariffs at consumer level from Tk 4 a unit in February 2011 to Tk 5.75 a unit now on the other. The rise in the retail power prices occurred at a time when people at large, especially those belonging to low-income groups, have been reeling under the unabated surge in the overall cost of living, including the prices of essential commodities, since the incumbents assumed office in 2009.
Allowing the private sector to outpace the public sector in terms of power generation in particular has some other ramifications as well. In the first place, it paves way for the owners of the power plants, particularly those desperate to make quick money, to even hold the nation to ransom at any moment. It is not to suggest, however, that private investments in the power sector, a sector key to industrialisation which indeed demands huge investment for its rapid growth within a short period, should be discouraged. What the government needs to do is give stress on public sector investment on power generation to keep it cost-effective and free from any threat from any vested interests.
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