Payra power ready for December launch, new challenges await

The country’s first mega coal-fired power plant in Payra is set to begin partial operation from December and help speed up industrialisation but with a set of new challenges.

Power Board sources said that the Chinese-built 1320 megawatt plant is already 81 percent complete and is far ahead of the constructions of Indian Rampal and the Japanese Matarbari mega coal power projects.

Initially, the plant is expected to generate 600 megawatts using coal imported from Indonesia. Within June next year, the plant will go for full operation.

While this is an exciting news for a country that reeled in energy crisis for more than two decades, the Payra 1320 megawatt power plant demands that the nation handles a set of challenges that it had never dealt with before.

To run this plant alone in its full capacity, the country would have to import around 4 million tonnes of coal from Indonesia a year. The handling of such a huge volume of coal is a technical and environmental challenge.

This would impose an energy import bill of US 400 million dollars, on top of $3.5 billion dollars the nation is spending for import of Liquefied Natural Gas (LNG) per year.

While spending so much money for primary energy to feed the power plant, the government faces the challenges of finding adequate customers to buy the power. A new 1320 mw plant can feed general customers of at least six or seven districts. 

Till date, the biggest power plant to come into operation is the AES Meghnaghat 450mw power project. But when that project came into operation two decades ago, the country had frequent power outage problems—a scenario that no longer exists today. 

The deal for the Payra 1320 megawatt thermal coal power project was signed in late 2014 and was supposed to come into operation from December 2018. While being one year behind the schedule, it is doing much better than the Rampal plant that was signed in 2013 with the initial goal to complete it within three years. This plant is now expected to come into operation in 2021 alongside the 1200 mw Japan-funded Matarbari plant. The Matarbari deal was also signed before the Payra project. 

The cost of power from Payra plant would be close to Tk 7 per kilowatt hour—which is on par with other recent coal power projects, but more than double the price of the Meghnaghat power project.

Power Division data show that the country is currently working on 19 coal-based power plants which comprise the capacity of a total of 18,392 megawatts. 

However, there is no visible progress in these projects except the Matarbari, Payra and Rampal power projects. 

To supply coal to Payra plant, the government has signed a contract with PT Bayan Resources Tbk, an Indonesia-based coal mining company. Large ships carrying the coal will anchor at the deep sea near the Payra port, allowing smaller ships to unload the coal and deliver it to the plant. 

This tedious and costly arrangement will continue till the construction of Payra deep seaport is complete over the next few years. 

The success story

While most large power projects typically face several years’ delay in completion, how did the Payra project finish almost in time?

The project implementing agency credits this success to a transparent land acquisition process and a resettlement programme, multi-tasking plan and above all, a good leadership. Disputes over land acquisition and resettlement can often eat up project implementation time. 

“Teamwork was the main factor behind this success. Besides, the workplan also played a vital role as we have been working in a parallel system rather than sequential system,” said Shah Abdul Maula, project director of the Payra plant.  

Power experts however partially credit quick land development work for the project to other agencies. As the government is developing Payra as a deep seaport, the land filling work was already in progress when the power project’s implementation began. The Payra power project authorities did not have to face this hurdle, something the Matarbari and Rampal projects had to face.

Financial closure and environmental clearances for this project also came faster than the two other projects.

“The Payra power plant has been implemented by China, with Chinese fund. We know that Chinese projects progress faster than those financed by other countries. This was the main factor behind the early arrival of Payra power project,” said Power Cell’s Director General Mohammad Hossain. 

But BD Rahmatullah, former director of Power Cell, questions the quality of work and the equipment import process. 

He said, “An early handover of a project is not the main benchmark when the project is being implemented by Chinese firms not having good international reputations. 

“The quality of equipment and work should be monitored because it will be the prime issue after commissioning the project,” he added.  

Every procurement for Payra power project was done through a direct tender process that lacks accountability and transparency.