Excess capacity payment to power plants not less than Tk36,000cr in 15 years: White Paper

Assuming the underutilisation of other power plants (gas, coal), the total excess capacity payment would not be less than Tk36,000 crore in the last 15 years, the White Paper on the State of Bangladesh Economy has said.

In the draft White Paper submitted to the chief adviser today (1 December), it said the estimate of excess capacity payment is a difficult task.

"The total capacity/rental payment to the private sector from 2010-11 to 2023-24 was approximately Tk1,15,000 crore."

It said the overall plant factor (percentage of utilising full capacity) of the total system varied between 42% and 46% in the last five years.

"This is an indication of a very inefficient system," the paper said, adding, "A 65% plant factor is achievable by minimising maintenance, reducing standby capacity and full supply of fuel."

Since 2014-15, high-speed diesel (HSD) and heavy fuel oil (HFO) power plants awarded under Special Provision Act were paid Tk15,551 crore and Tk9,100 crore as capacity payment respectively, it said.

The average plant factors of HSD and HFO in the last five years were only 32% and 9.22% respectively. Assuming at least 65% plant factor the oil-based power plants under Special Provision were paid Tk10,000 crore additional capacity payment.

The rental plants that were awarded in 2010-11 made as high as 35% profit against a standard 15%. The windfall would not be less than Tk10,000 crore, it added.

The paramount allegation of corruption was in awarding power plants in the form of commissions, the paper said.

"Obviously there is no documentation of such transaction but 10% of the project cost is a conservative estimate. With an investment of $30 billion in generation since 2010, at least $3 billion changed hands as a kick back."

In this regard, the paper said the Prime Minister's Office (PMO) was the most powerful political institution in the country and throughout the past government, the Ministry of Power, Energy and Mineral Resources (MPEMR) had no full-time minister.

"Instead, the prime minister held additional responsibility as minister for MPEMR since 2009. Under her leadership, ruling political party members, lobbyists, private businesses, and independent power producers became major stakeholders in this sector bypassing due processes."

It said the energy adviser, the state minister, and the Power Division were the conduit of corruption.

"Every single deal from a small solar plant to a mega project like Adani was approved by the PMO."