Energy crisis threatens as Payra Port coal levy dispute escalates

The row over the 'maintenance levy on coal transportation at Payra Port' between the National Board of Revenue (NBR) and the Bangladesh Power Development Board (BPDB) has created serious havoc in power production at two major power plants in the southern part of the country, hindering the unloading of the primary fuel (coal) required to operate the 2,640 MW power plants.

Finance Adviser Dr Salehuddin Ahmed, Power and Energy Adviser Fouzul Kabir Khan, and Shipping Adviser Brig Gen (Retd) Dr M Sakhawat Hossain met on Thursday to settle the issue but failed to reach any conclusion.

"A committee led by the Additional Secretary of the Finance Division will work on the issue, with representatives from the Power Division, BPDB, NBR, and two representatives from the power companies being members. The committee has been asked to submit its report within the next 15 working days," a senior official of the Finance Ministry said.

In December, the Shipping Ministry issued a gazette notification introducing a port maintenance fee on imported coal without consulting the Ministry of Power Division, increasing the annual cost by Tk 675 crore for transporting 7 million tonnes of coal through Payra Port for the 1,320 MW Bangladesh-China Power Company Limited (BCPCL) and 1,320 MW RPCL-Norinco International Power Limited (RNPL).

According to the Power Division, the levy contradicts commitments made to the International Monetary Fund (IMF) to reduce power production costs. "We sent a letter to the NBR and Finance Ministry knowing that this increase will raise the tariff of power from these two plants. However, they have yet to inform us of anything in this regard," a senior official of the Power Division said.

Both the BCPCL and RNPL, the primary coal importers, expressed concerns about the financial burden and wrote letters to the BPDB to address the issue. RPCL's official stated that the levy would cost Tk 360 crore annually, increasing electricity tariffs by Tk 0.50-Tk 0.60 per unit. He also highlighted inefficiencies in port operations, citing an additional $7-8 per tonne expense due to incomplete channel dredging.

BCPCL's official disclosed that $68 million had been spent on channel dredging from 2019 to 2020. The dredging company proposed tiered charges based on channel depth, but the Ministry of Shipping set a fixed rate of $7.71 per tonne.

On 13 January 2025, Payra Port Authority conditionally approved the unloading of 56,614 metric tonnes of coal for RPCL-Norinco International Power Ltd after temporarily halting the process due to the unpaid levy. The company warned that delays in resolving the issue could disrupt power production as the plant prepares to synchronise operations next week.

In a letter to Payra Port Authority, RPCL-Norinco called for urgent action to release coal shipments and proposed an inter-ministerial discussion. However, the port authority maintained that the levy, formalised in May 2024, is a settled issue.

The levy also affects other coal-fired plants, including the 1,320 MW Payra power plant and the Matarbari 1,200 MW ultra-supercritical power plant. These facilities are critical to meeting Bangladesh's energy demands, especially during the summer. Rising costs threaten the Bangladesh Power Development Board (BPDB), which already faces Tk 30,000 crore in unpaid bills.