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There are more than 70 lakh power customers across the country with the peak demand for power exceeding 5,200 megawatt (MW) against a maximum supply of 3,300 MW last year.

The PDB’s earning rate from power sales is decreasing incrementally. On an average, the PDB now purchases power at Tk 2.53 per kilowatt hour (per unit) and sells it at Tk 2.15. In 05-06, the PDB earned Tk 2.27 per unit by selling power and Tk 2.41 in the previous fiscal year. It sells 80 percent of its power to the Desa, Desco, REB, and the Western Zone or Westzone at a rate much lower than its average price. For instance, the REB buys power at Tk 1.94 a unit and sells it around Tk 3 to rural customers. In addition, in the last fiscal, the PDB handed over huge distribution lines to REB. Some of these included PDB’s profitable zones. The Desa, which is the biggest consumer, and is mainly responsible for the loss making spectacle where power thieves take away nearly one fourth of the sales, pays the PDB Tk 1.88 per unit. The Desa however pays another Tk 0.23 per unit to the PGCB as transmission fee. The PDB sells the remaining 20 percent of the total power to its own customers at a much better rate. But this share is too little to improve the PDB’s financial condition. Only a few years back, the PDB’s average power purchase cost Tk 2.15 per unit while the sale price was around Tk 2.4. Back then, systems loss had been the major cause of the PDB’s loss.

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.”

"The markets are awash with cheaper Indian powder (milk) that has forced prices of liquid milk and also encouraged local buyers including milk factories to buy from them," said one farmer in Sirajganj district. Farmers say prices have fallen below productions costs to 35 taka ($0.51) per litre and buyers want it even lower. There are more than 80,000 dairy farmers in Bangladesh. The dairy farmers have asked the government to raise taxes on imported milk powders, which they cut last year to 35 percent from 75 percent.

The country's march towards white revolution has suffered a severe jolt as a massive slump in price of imported powdered milk and low taxes put the dairy industry on a life support.

Clothing manufacture underpins impoverished Bangladesh's industrial activity, accounting for 80 percent of overseas sales and pulling in 11 billion dollars a year.

At the start of Bangladesh's financial year in July, garment exports were up 72 percent from a year earlier, but by February growth had slowed to four percent year-on-year as orders from Western retailers evaporated.

"The whole economy can unravel if garment exports continue to slow down as many other sectors such as transport, services and construction are directly dependent on this sector," said Masato Miyazaki, an IMF adviser on Bangladesh.

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"At least 2 million to 2.5 million new local jobs will be needed until the global economy recovers fully, compared with 1 million to 1.1 million local job creation needed prior to the global economic crisis," the WB said in a report "Bangladesh: State of the Economy and Policy Response to the Global Economic Crisis" launched yesterday.

Due to the global meltdown, the jute sector job loss is projected to reach 50,000 by the end of fiscal 2009, the report said. Twelve spinning mills out of 341 have been shut in the textiles sector.

"The labour force is increasing by two million people a year. If manpower exports revert to the pre-boom era in the Middle East (up to 300,000 a year), the domestic economy will have to create jobs for another 500,000 people a year," the WB said.

Zahid said the economy of the country was stable and the projected economic growth for the fiscal year 09 would be 5.5 per cent. He, however, said in the worst case of declining of export and remittance it could be as low as 4.5 per cent in the fiscal year 09.The senior economist of the bank said that the inflation rate of 6.1 per cent in January of this year was quite satisfactory due to the falling prices of commodities in the international market.

Recession in the developed markets and slowdown in the Middle East has already begun to pose threat to Bangladeshi exports and remittance inflows, he added. Citing a 30 percent decline in capital machinery import, Zahid said there might have been a significant slowdown in investments. On the impacts of the global crisis he said, export, remittance, revenue and banking sector along with the employment would be affected severely. "At least 2 to 2.5 million new local jobs will be needed until the global economy recovers, compared to 1.1 million job creation prior to the crisis," he mentioned."Demands for bailout packages from businesses might not help the poor and the agriculture, livestock and fisheries sectors are doing well", said the senior economist of the international donor agency.Xian Zhu said the impact on Bangladesh's growth may not be severe during the current fiscal year and the government should prepare the best for the worst.He said that government need to take precautionary measures to mitigate the impacts of the crisis especially for the poor by creating more jobs internally and safety net programmes should be given highest priority."The government needs to carry out the unfinished reform agenda to turn Bangladesh a middle income country," he added.

The top three operators -- Grameenphone, Banglalink and AKTEL -- have withdrawn their Tk 0.25 special tariff. The three operators control more than 90 percent of the market, or 40.14 million customers. The total market size is 45.21 million customers.The mobile operators had previously charged Tk 0.25. Now they are charging a minimum of Tk 0.40 to Tk 0.49 per minute. Grameenphone and Banglalink have recently increased their 'start-up' prices to Tk 900, which ranged from Tk 450 to Tk 500 a month ago. "Bangladesh has the lowest call rates in the world, which means that return on investment takes a very long time. This is why most mobile operators today are still not profitable," Ahmed Abou Doma, chief executive officer and managing director of Banglalink, said yesterday.

Egypt-based Orascom Telecom's subsidiary Banglalink entered the market in 2005. Even after having the market's second largest customer base, the company is yet to enjoy profits mainly because they had to bear the huge subsidised connection costs.

Till December 2007, Aktel was churning profits. But after paying a big fine for conducting illegal VoIP (voice over internet protocol) operations, like other companies, Aktel started to incur losses from early 2008. However, among the top three players, only Grameenphone is now enjoying profits. But it has also revised its tariff plan to continue the trend.