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The interim government has initiated steps to amend power-purchase agreements (PPAs) and lower tariff rates for nine power plants that have been selling electricity to the Bangladesh Power Development Board (BPDB) without securing official approval for their tariffs, according to sources.
Before revising the PPAs, it will negotiate the tariff rates with the power plants, owned by the state-run entities fully or partially, and get it approved by the advisory council for government purchase.
"We are now in talks with the power plant managements to set lower tariff rates," a senior BPDB official told The Financial Express Thursday. New and lower tariffs could be mutually agreed upon soon, he added.
These power plants, with a combined capacity of 3,414 megawatts, were implemented during the previous Awami League government.
Despite supplying power to the national grid, their tariffs were never formally endorsed by the Cabinet Committee on Government Purchase -- a mandatory requirement for such deals, according to official sources.
Instead, the state-run BPDB has been buying electricity from these plants solely on the basis of power purchase agreements (PPAs) signed with the respective operators.
These deals were reportedly approved either by the Power Division or the Energy Division and Mineral Resources Division at that time, bypassing the necessary cabinet committee clearance, sources familiar with the matter said.
The irregularities came to light during an internal audit conducted by the interim administration, which has now asked the Power Division and the BPDB to clarify how such contracts remained in effect without proper authorisation.
All nine plants began operations between 2012 and 2023. They include two major coal-fired joint ventures -- the 1,320MW Rampal plant under the Bangladesh-India Friendship Power Company Ltd (BIFPCL) and the 1,320MW RPCL-Norinco plant in Patuakhali.
Other facilities include four plants under Rural Power Company Ltd (RPCL), two by BR PowerGen Ltd, and one solar power plant under North-West Power Generation Company Ltd (NWPGCL).
The list of plants operating without cabinet-approved tariffs includes: Bangladesh India Friendship Power Company Ltd (BIFPCL)-owned 1,320MW Rampal Power Plant, RPCL-NORINCO International Power Ltd-owned 1,320MW Patuakhali Power Plant, 210MW Mymensingh Power Plant, 52.194MW Kodda Power Plant, 25.50MW Rowzan Power Plant, and 105MW Gazipur Power Plant owned by Rural Power Company Ltd (RPCL), 163MW Mirsharai Power Plant and Kodda 150MW Power Plant owned by BR PowerGen Ltd, and Sirajganj 68MW Solar Park owned by Bangladesh-China Renewable Energy Power Company Ltd.
Tariff rates of these power plants, which are run on high sulfur fuel oil (HSFO) is between Tk 20-22 per unit (1 kilowatt-hour), coal is between Tk 11-13 per unit and gas between Tk 5-6 per unit.
Due to the lack of formal approval, the Ministry of Finance (MoF) has recently withheld Tk 50.56 billion in subsidies earmarked for these plants for the period from October 2024 to June 2025.
The Finance Division has instructed the Power Division to obtain approval from the Advisory Council on Public Purchase by July 2025 in order to facilitate future disbursement of subsidies.
"These are gross violations of the country's existing regulations," said Professor M Shamsul Alam, energy adviser to the Consumers Association of Bangladesh (CAB).
He called for the formation of an independent commission, headed by a retired judge, to investigate corruption and irregularities in the power and energy sector.
"Energy stakeholders must be included in such a commission," Mr Alam added, stressing the need for transparency and accountability in a sector he described as plagued by 'energy crimes'.
Azizjst@yahoo.com