Contract with rental, quick rental power plant owners cannot be extended: BPDB

The Bangladesh Power Development Board (BPDB) has said that the contract period with rental and quick rental power plants cannot be extended.

"The government allowed building rental and quick rental power plants on a short-term basis but at presenttheir owners are pursuing long term agreement, which cannot be acceptable in any case," said BPDB Chairman Belayet Hossain at a webinar titled "Upcoming National Budget FY 2021-22: Expectation of Power Producers" on Saturday.

Forum for Energy Reporters Bangladesh (FERB) organised the online seminar which was also addressed by State Minister for Power, Energy and Mineral Resources Nasrul Hamid, Power Secretary Habibur Rahman, Power Cell director general Mohammad Hossain and President of Bangladesh Independent Power Producers Assertion (BIPPA) Imran Karim.

The BPDB chairman noted that the government still has to purchase electricity at a much higher rate from the private power producers and sell it to the consumers at a lower rate, incurring a huge financial loss to the BPDB.

This creates a huge gap of Tk1.60 per unit between the BPDB's average generation cost and electricity supply to the consumers, he noted adding that the government had to provide Tk7,000-8,000 crore in the current fiscal as a subsidy to fill the gap.

He said that "this gap will go up and the government has to provide more subsidy in this fiscal year" and there is an indication that allocation for the power sector may be decreased in the upcoming national budget as the government's focus is shifting to the health sector.

State Minister Nasrul Hamid said the BPDB has to be more efficient in power generation by retiring the inefficient power plant without showing many excuses. 

He, however, agreed to different demands of the private power producers like lowering the income tax, reducing import duty on furnace oil, waiving advance income tax and removing complexities in stamp duty.

Power Secretary Habibur Rahman assured the private power producers of placing their demands to the National Board of Revenue.

BIPPA president Imran Karim said that the private power producers have to face difficult times due to the increased import duty of furnace oil to 34% and the obligation on paying advance income taxes.

Mohammad Hossain said that although the country's power generation capacity crossed 24,000 MW, industries are yet to trust that the government can supply quality power.

"That is why, 3000 MW power is being generated by the captive power producers in the industrial sector", he added.

BIPPA Vice President Mozammel Hossain made a presentation on the topic while FERB Executive Director Shamim Jahangir conducted the webinar.

Mozammel Hossain said that private power producers are facing delay in getting their payments against the electricity sale to the government.

He also alleged that private power producers are not getting environmental clearance certificates before commissioning their power plants.