Cabinet likely to okay power purchase proposal today

The cabinet committee will sit today (Wednesday) to approve Power Division's proposal for purchasing 1,788MW of electricity from nine private companies through 10 unsolicited deals for durations between five to 15 years.
Off it, 800MW of diesel-based power will cost Tk. 7,000 crore, while the rest, furnace-oil-based power, will cost Tk. 3,550, however, generating of 1800MW of power will cost around Tk 10,500 crore annually.
"We will purchase 988MW from six furnace oil-based plants at Tk 10.6 to 10.6 per unit while the tariff will be Tk 20.38 on average for the rest 800MW from four diesel-fired ones," Chairman Bangladesh Power Development Board (BPDB) Khaled Mahmood told the Daily Observer on Tuesday.
The government, headed by the power secretary Dr Ahmad Kaikus, rushed to form a high-level negotiation committee to approve generating of 1,800MW of power on emergency basis to different private companies.
"We have decided to produce 3,000MW of electricity within a short period of time through unsolicited deals and tendering process," State Minister for Power and Energy Nasrul Hamid told the media justifying the move onTuesday.
The decision was taken after the government came under widespread criticism in May amidst a nagging electricity supply shortfall during the hot summer.
As per the government's decision, the furnace oil-based power plants will have to start producing power within nine months and diesel-based plants within 6 months after the final deals are signed.
Meanwhile, the Prime Minister's Office (PMO) last week approved Power Division's proposal.
The Power Division earlier decided to purchase electricity from the nine power sponsors as the annual rise in electricity demand is predicted to surpass the previous estimation of more than 10 percent.
The government will pay an average 25.2793 US cents per kilowatt from the proposed diesel-fired plants having a combined capacity of 800MW. The tariff from the existing rental plants is 25.7914 US cents a unit (kWh).
The power division also claimed that it will purchase 988MW of electricity from six furnace oil-fired plants at 10.575 US cents kWh, while the rate is 10.5990 kWh from four similar rental plants based in Chittagong.
"The Power Division required 18-27 months for implementing each of the HFO- fired power projects earlier. But the new plants will take only nine months to install," the proposal said.                
Of the proposed independent power plants, Summit Group and Orion Group will set up a 300MW and a 100MW plant in Kodda (Gazipur) and Labonchara (Khulna) with the same power tariff at Tk 8.55 (10.60 US cents) a unit.
Confidence Power will set up an 113MW plant with a tariff of Tk 8.55 a unit in Bogra while the Midland Power and Acorn Infrastructure Services will install 150MW and 100MW plants with power tariff at Tk 8.47 (10.50 US cents) per unit in Ashuganj and Julda (Chittagong) respectively. Desh Energy will set up a 200MW plant in Chandpur with power tariff at Tk 8.59 (10.65 US cents).Bangla Trac Ltd will implement two diesel-fired plants at Daudkandi (Comilla) and Nowapara (Jessore) having combined capacity of 300MW with a tariff at Tk 20.50 (25.4171 cents).
Besides, Aggreko International Projects Ltd will install a 200MW plant in Keraniganj with tariff at Tk 20.16 (25.0039 cents) a unit. APR Energy Ltd will set up a 300MW plant in Keraniganj with power tariff at Tk 20.49 (25.4171 cents) a unit.
The private power sponsors will have to pay $200 per megawatt as liquidated demurrage for their failure in implementing power projects as per the stipulated timeframe, the official said, adding that the demurrage fee was only $100 previously.
The BPDB is expected to get the required electricity by March 2018, the proposal read.
According to BPDB sources, it received 136 unsolicited proposals following the announcement that the government in principle decided to generate 3,000MW of electricity in the next six to nine months under unsolicited deals.