Power Distribution Reform on The Cards 

The government decision to explore privatisation of electricity distribution - as announced by Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood - signals a major policy shift that could reshape the country’s chaotic energy landscape for decades.

While the proposal is likely to generate countrywide debates, we believe the privatisation must focus on results, not ideology: Will the reform deliver better services, greater efficiency and improved accountability for consumers?

However, the minister’s assessment of the current state of the energy sector is somewhat sobering. Years of inefficient planning, over-dependence on imported fuel and insufficient investment in domestic gas exploration have noticeably left our country vulnerable to supply disruptions and price shocks. Moreover, recent problems surrounding LNG infrastructure and recurring gas shortages across different parts of the country vividly underscores the fragility of the existing flawed system.

The minister was also apparently right, emphasising on domestic gas exploration while strengthening the country’s LNG infrastructure. It is time we diversify our energy sources while accelerating investments in renewable energy. On that note - introducing incentives for rooftop solar panels is a welcome step and could well encourage a broader culture of sustainable energy use.

Under current disturbing circumstances, the argument for reform deserves serious consideration. Electricity distribution is the critical link between power generation and consumers. Even when sufficient electricity is produced, inefficiencies in distribution can result in technical losses, poor customer service, weak bill collection and financial waste. 

We believe, if private sector participation can address these shortcomings, it should not be dismissed outright. In addition, there are ample examples in many countries where private sector engagement in electricity distribution has improved operational performance and customer satisfaction. 

It is only true that competition, performance-based contracts and stronger managerial accountability often produce results that state-owned entities struggle to achieve. In Bangladesh, we have already benefited from private investment in several sectors, and there is no reason why carefully regulated participation in power distribution cannot contribute positively as well.

Concurrently, we must remember that privatisation is not a magic solution. Success or failure of such a move will depend entirely on how it is formulated, regulated and implemented. 

We don’t want our consumers to be victims of higher tariffs, reduced oversight or private monopolies - the public deserves assurances that private operators will be held accountable for service quality, reliability and fair pricing.

Ultimately, we consider the proposed privatisation of electricity distribution as a potential tool for improving efficiency and performance in the energy sector. Once implemented transparently, regulated effectively and guided by prioritising public interest, it could help modernise a sector burdened with decades of inefficiency and financial strain. However, true success lay not in transferring of authority and management from public to private hands. It will be whether ordinary citizens receive unimpeded electricity, better service and confidence that the system works for them.