More power plants to be awarded to private cos

http://www.thefinancialexpress-bd.com/more.php?news_id=129050&date=2011-03-13

More power plants to be awarded to private cos
M Azizur Rahman

The power ministry intends to involve private sponsors in more power plants through unsolicited deals and bypassing the normal process of tender.

However, most of the previous such plants awarded to private sponsors are likely to miss the deadline to come online.

The ministry recently sought Prime Minister’s approval for awarding several more power plants to the interested sponsors, following negotiations with them.

It said awarding the plants would help augment generation capacity for electricity supply to the national grid within a short period of time, aiming at easing the mounting electricity shortage across the country.

As the safeguard measure, the new Speedy Supply of Power and Energy (Special Provision) Bill 2010 has a provision to give immunity to the personnel involved in implementing projects in power and energy sector.

The government has enacted the law to protect the government officials and all associated stakeholders from any subsequent legal challenge in the court over awarding unsolicited plants to sponsors.

Besides, the government will have the authority to bypass any existing law, including Public Procurement Act 2006, which has been, according to official sources, impeding the execution of new power and energy projects.

Officials said the government has already awarded 15 high-cost diesel and furnace oil-run ‘quick’ rental power plants, having an aggregate capacity for additional 1,435 megawatts (mw) of electricity generation, through unsolicited deals.

A couple of the quick rental power plants, generating around 250 mw of electricity, have already come online within the “stipulated” time. However, a good number of the remaining plants are behind their work schedule.

Officials said the government’s desperate move to resolve the country’s nagging electricity problem by opting for high-cost oil-based power plants but without ensuring proper fuel supply, is the main reason for delay in execution of the plants.

Lack of coordination among the state-owned enterprises, especially Power Development Board (PDB), Bangladesh Petroleum Corporation (BPC), Bangladesh Railway (BR) and Bangladesh Inland Water Transport Authority (BIWTA), has already created a difficult situation for the government.

Besides, the country’s existing fuel storage capacity has compounded the problem for meeting sufficiently the need for the quantities of fuel, required to run the new diesel and furnace oil-based power plants.

The government now runs the risk of paying a large sum of money as compensation to the sponsors for its failure to arrange necessary fuel supply to the plant sites.

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