Long term options not in sight

Pvt power projects delayed by fund constraints

by Manjurul Ahsan
Sylhet 150 MW power plant

Sylhet 150 MW power plant

The private entrepreneurs have deferred the installation of at least 23 long-term power plants with combined generation capacity of 3,524MW by up two years putting the government under pressure of purchasing expensive electricity from rental suppliers.
All the private companies deferred the dates of commissioning their power plants which was revised between 2012 and 2013 after they failed to show any progress in implementing the projects in due time, officials said.
They said failure in arranging finance for the power projects was the main reason for the delay although the government opened the sector for the private entrepreneurs on the ground that the public sector alone would not be able to manage the huge investment.
Apart from financial constraints, uncertainty of gas supply to the power plants over 22 years and legal disputes regarding the land of the project sites were also cited as other factors that are delaying the implementation of the projects, entrepreneurs claimed.
Out of the 23 plants, only three with 128MW capacity have so far started feeding the national grid on commercial basis until March 2014, according to the data available with the state-run Power Development Board.
In April, however, four more plants with 595MW capacity began to run on a trial basis.
Since coming to power in 2009, the Awami League-led government awarded the contracts to the private entrepreneurs for the installation of 23 power plants.
The plants were part of the government’s medium-term plan for power generation for 15 to 22 years and were meant to mainly run either on furnace oil or natural gas.
Power Development Board officials told New Age that most of the companies delayed signing electricity sales contracts with the board for months.
They said this allowed the companies to avoid incurring financial penalties which the companies would otherwise have to pay if they did not supply electricity within a particular time period after signing the contracts.
Sponsors of 10 projects for which contracts have been signed, have failed to submit papers to the authorities setting out the sources of financing for their projects (known as ‘financial disclosure’) in several months.
In July 2013, the government, under pressure from the local private companies, scraped a condition of arranging 70 per cent investment from the foreign sources for their projects.
On January 29, 2012, the government had set the condition to curb the outflow of the foreign exchange in importing capital machinery for the power plants, officials said.

Model of Fenchuganj 90MW power plant

Model of Fenchuganj 90MW power plant

Till March this year, the government signed contracts to set up 75 plants which would be able to generate a total of 10,864MW of electricity — with 32 plants set to be built by the public sector and 43 (including short-term plants) by the private sector.
Only 17 public sector plants with a combined generation capacity of 1,785MW of power and 20 private short-term rental plants with a combined generation capacity of 1,653MW have started operations.
Regent Energy and Power Ltd’s 108MW plant at Ghorashal, Barkatullah Dynamic’s 50MW plant at Patenga in Chittagong, Digital Power and Associates’ 102MW plant at Gagan Nagar in Comilla and Summit Power’s 335MW plant at Meghanghat in Narayanganj are now supplying electricity to the national grid on a trial basis.
The plants which have already missed the revised dates for beginning their commercial operation include: ECPV Chittagong Ltd’s 108MW plant, Sinha People’s Energy Ltd’s 53MW plant, Power Pac Mutiara Consortium’s two plants with 195MW capacity, Awami League parliamentarian Aslamul Huq’s three plants with 324MW capacity, Sinha Energy Ltd’s 53MW plant, Dhaka Northern Power Generation Ltd’s 55MW plant, Dhaka Southern Power Generation Ltd’s 55MW plant and Summit Power’s 341MW plant at Bibiyana in Sylhet.
The other delayed projects include a 225MW plant at Sirajganj by LANCO Infratech, a 522MW plant at Maoa of Munshiganj in Dhaka and a 630MW plant in Khulna by Orion.
The government is still undecided over awarding a contract to one of the short-listed firms to set up a 200MW power plant at Ashuganj.

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