DEALING WITH THE IPPS
In addition to incurring losses, the PDB is contract-bound to make payments to independent power plants (IPPs) or for private power in foreign currency. Often the PDB is seen running into severe liquidity crisis in making these payments.
The cost of IPP power had been largely very friendly for the PDB but the lack of PDB’s power sales price adjustments in the recent years is now taking its toll.
The PDB paid a total of Tk 1,707 crore in 2004-05 and Tk 1,934 crore in 2005-06 to IPPs.
The IPPS in 2005-06 supplied over 36 percent of the total electricity distributed across the country. The country produced 2,2741 gigawatt hour power during this time in which the IPPs supplied 8,286 gWh.
Of all the IPPs, the Meghnaghat and the Haripur AES plants — 450MW and 360 MW — have kept the sinking PDB afloat for a few years.
While the PDB swallows heavy losses from all private and public power plants due to inconsistent government policies, power from both Meghnaghat and Haripur plants remain the least costly.
The average cost of Meghanaght power was Tk 1.46 a unit in 2004-05 and Tk 1.59 in 05-06, Haripur Tk 1. 25 in 2004-05 and Tk 1.33 in 05-06. The price remains low because of the original deals, and size and location of the plants although the deals demand payment in dollars.
In contrast, other IPPs which were conceived and pushed by the Awami League government have remained unkind to the PDB.
Two Mymensingh 70 MW simple cycle gas-fired units under the Rural Power Company (RPCL) charged Tk 3.51 a unit in 2005-06. The RPCL is owned by the government’s Rural Electrification Board (REB) and several palli bidyut samities, and is not a typical privately owned company.
The NEPC 90 MW gas fired barge-mount plant charged Tk 3.63 a unit in 2005-06, Westmont 90 MW gas-fired barge-mount plant charged Tk 3.68 a unit during the same period and Khulna 110 MW oil-fired plant Tk 8.49 a unit.
“Of them, Khulna unit is costly because it uses imported oil. Oil price has gone up from $90 a tonne to $300 in two years. The NEPC and Westmont deals demand payment in dollars, and the high dollar rate has contributed to this price hike,” one source pointed out. “Besides, small power deals always put up comparatively high prices.”