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Govt must come out of short-term rental power policy
Published: 00:05, May 11,2017
THE government’s policy on the purchase of electricity from rental power plants — which has been in place for quite some years now and is set to roll further — has proved to be a double-edged sword because of the government’s negligence towards the implementation of mid- and long-term power projects, which, fully implemented, could have afforded some relief.
And the policy cuts the consumers most, having to pay in increased power tariff, and the government less, as it does not seem to feel the pinch, while it lines the pocket of the politically powerful people who run the plants.
The policy has also come to be a drain on the national exchequer as the government has already paid 20 rental power plants, during their original contract tenure since 2010, Tk 60 billion and is set to pay 15 of them that have their contract tenures extended Tk 20 billion more in capacity charge till 2020.
The capacity charge that the rental power suppliers now realise, after having the return on their investment during the original contract tenure, is both illogical and unjustifiably high.
A further extension of the contract tenure with the rental power suppliers, which the government will in all likelihood be forced to effect in view of a tangible progress in its mid- and short-term power projects only after 2024, would compound the situation.
The government, as New Age reported on Wednesday, is almost set to continue buying electricity by paying higher in capacity charge as there is no respite in sight, not until 2024 at least, from rental plants because of the government’s failure to do what it should have done by now.
There is no way out for the government from the grip of short-term rental power supply as 35 per cent of the mid-term projects, which should have been completed by 2015, is, as power board officials are quoted as saying, yet to be implemented. Coupled with this, there has been no significant progress in the implementation of long-term power projects which aim to increase power generation capacity by 13,000MW by 2021. In such a situation when the government claims to be generating 14,000MW of power, consumers are forced to pay higher for power only because less than a fourteenth of the total generation needs to be sourced from the rental plants.
While allegations are rife that this failure of the government in going ahead properly with the mid- and long-term power projects is deliberate, to advantage a handful of the politically powerful people, speculations are also there that the government does not reduce prices of fuel oil used in the power sector, although the prices have been much lower on the international market for two years and a half, as it shores up money from fuel oil to pay for the rental power.
Yet still, the Energy Regulatory Commission increased prices of electricity by 69.25 per cent, up from Tk 3.75 a unit to Tk 6.33, in eight phases between March 2010 and September 2015.
The government must come out of its policy on expensive, short-term rental power and attend to mid- and long-term power projects.
- See more at: http://www.newagebd.net/article/153...term-rental-power-policy#sthash.mAn6OJlj.dpuf
Published: 00:05, May 11,2017
THE government’s policy on the purchase of electricity from rental power plants — which has been in place for quite some years now and is set to roll further — has proved to be a double-edged sword because of the government’s negligence towards the implementation of mid- and long-term power projects, which, fully implemented, could have afforded some relief.
And the policy cuts the consumers most, having to pay in increased power tariff, and the government less, as it does not seem to feel the pinch, while it lines the pocket of the politically powerful people who run the plants.
The policy has also come to be a drain on the national exchequer as the government has already paid 20 rental power plants, during their original contract tenure since 2010, Tk 60 billion and is set to pay 15 of them that have their contract tenures extended Tk 20 billion more in capacity charge till 2020.
The capacity charge that the rental power suppliers now realise, after having the return on their investment during the original contract tenure, is both illogical and unjustifiably high.
A further extension of the contract tenure with the rental power suppliers, which the government will in all likelihood be forced to effect in view of a tangible progress in its mid- and short-term power projects only after 2024, would compound the situation.
The government, as New Age reported on Wednesday, is almost set to continue buying electricity by paying higher in capacity charge as there is no respite in sight, not until 2024 at least, from rental plants because of the government’s failure to do what it should have done by now.
There is no way out for the government from the grip of short-term rental power supply as 35 per cent of the mid-term projects, which should have been completed by 2015, is, as power board officials are quoted as saying, yet to be implemented. Coupled with this, there has been no significant progress in the implementation of long-term power projects which aim to increase power generation capacity by 13,000MW by 2021. In such a situation when the government claims to be generating 14,000MW of power, consumers are forced to pay higher for power only because less than a fourteenth of the total generation needs to be sourced from the rental plants.
While allegations are rife that this failure of the government in going ahead properly with the mid- and long-term power projects is deliberate, to advantage a handful of the politically powerful people, speculations are also there that the government does not reduce prices of fuel oil used in the power sector, although the prices have been much lower on the international market for two years and a half, as it shores up money from fuel oil to pay for the rental power.
Yet still, the Energy Regulatory Commission increased prices of electricity by 69.25 per cent, up from Tk 3.75 a unit to Tk 6.33, in eight phases between March 2010 and September 2015.
The government must come out of its policy on expensive, short-term rental power and attend to mid- and long-term power projects.
- See more at: http://www.newagebd.net/article/153...term-rental-power-policy#sthash.mAn6OJlj.dpuf