Public money goes to pvt company

The government is set to use the Power Development Board's Electricity Maintenance Fund created through a verdict of the Bangladesh Energy Regulatory Commission (BERC) in 2011.
The BERC decided to amend the guidelines on the utilisation of the fund in a bid to justify the decision.
As per the guidelines the BERC could be able to take any decision in this regard ignoring public opinion but the money will be taken out of public pockets.
The BERC on Thursday held a workshop where it discussed how to manage the fund in its own way but finally it changed its stance, said a source in the BERC.
"We are now considering holding a public hearing on its primary decision to provide money from Electricity Maintenance Fund of the Power Development Board to private companies," BERC Chairman Monowar Islam said.
"Actually, the authorities want to favor North-West Power Generation Company (NWPGCL), a state-run company which sells electricity to the Power Board with 16 per cent profit, would pay the money in equity to its 50-50 venture with a Chinese firm as it needs to go for financial closing," a senior official said.
On March 15, the Power Division wrote to the BERC to direct the PDB to release Tk1,184 crore to the joint venture company, the officials said.
Earlier, the NWPGCL requested the Power Division to help it obtain the fund, they said.
A PDB official said it would be suicidal to use the fund for a private company which would charge 16 percent profit (rate of return) while selling electricity to the board.
The Bangladesh-China Power Company Limited (BCPCL) is implementing the project to construct a 1,320MW coal-fired power plant at Payra of Kalapara in Patuakhali.
The project cost has been estimated at Tk19,840 crore with a debt equity ratio of 80:20. The EXIM Bank of China will provide Tk15,872 crore under a credit agreement to be signed soon.
According to sources, though the PDB has been working towards forming a policy to use the fund, it has failed to reach any conclusion for the past six months.
It has held several meetings and finally decided to provide Tk1,184 crore in equity for a private company from Electricity Maintenance Fund of Power Development Board.
'It would be a breach of the consumers' mandate in creating the fund as the consumers allowed the 5.17 per cent hike in power prices in 2011 on condition that the fund would be used by the Power Board,' said Consumers Association of Bangladesh energy adviser Professor Dr Shamsul Alam.
He said there was no scope for using the fund in any project of a private company, even if it is a public sector company, as the PDB buys electricity from such companies at 18 per cent higher prices than it spends on its own generation.
In March this year, the BERC without a public hearing gave its nod to allocate Tk1,184 crore to the North-West Power Generation Company from the PDB's maintenance fund.
In February 2011, the BERC created the fund with 5.17 per cent of bulk power tariff for increasing PDB's capacity for low-cost power generation as well as proper maintenance of the power plants.
According to the BERC, it imposed a condition on the PDB's application for a hike in power tariffs after observing that PDB paid IPPs and rental power producers Tk1,000 crore per month as electricity bill.
It also observed that the contribution of the private sector to power generation would hit 62 per cent by 2016, and that the government needs to support the PDB by increasing the tariff time and again.
In the wake of severe criticism for frequent power price hikes, the BERC created the fund which accumulated Tk5,600 crore until January 2017, said officials.