The immediate-past Awami League government manipulated the power and energy sector by all means possible to benefit its cronies, opening windows for them to pocket public money and then launder it in full awareness of the consequences their actions would bring, revealed the white paper on economy submitted to the interim government on Sunday. 

Using fictitious and unrealistic data, the government set ambitious economic growth targets, leading to mismatched and excessive growth in generation, transmission and distribution capacities that only helped inflate power and energy bills.

While people suffered from inflation and industries lost competitiveness as a result, the immunity provided under the special provision act of 2010 gave Awami League’s political allies and financiers to go unchallenged, the white paper said.

As of October 2024, the total dues in energy and power sector is approximately Tk 50,000 crore or $4.16 billion, excluding dues to the National Board of Revenue, against $30 billion invested between 2009 and 2022 in power sector alone, the whitepaper said.

In a conservative estimate, the whitepaper noted, $3 billion changed hands in kickbacks.

‘Many argued that these violations fostered a group of crony capitalists in the country who benefited from government patronage and were also involved in the transfer of wealth out of Bangladesh,’ read a line of the white paper prepared by a committee of 12 members.

The transmission and distribution system, the daily and seasonal load management, primary energy supply, physical infrastructure of fuel import, storage and transport—all aspects of an integrated system were neglected in the planning of the energy and power sector.

The sector was run under monopolistic state companies completely controlled by bureaucrats and Awami leaders who awarded favours to their acquaintances without facing almost any resistance from the public or the political opposition.

For instance on how the favours took place, the white paper stated that tariff fixing was not well defined. For independent power producers and rentals, the tariff was ‘negotiated’. Irrespective of investment, the tariff negotiation was done by benchmarking previously tendered tariff or other negotiated deals, allowing favourable rates, terms and conditions to political and business cronies of the Prime Minister’s Office, energy adviser, state minister, secretaries and other key officials.

‘Apart from excess profit, it is suspected that many of these projects were used for money laundering by overvaluing project costs,’ the whitepaper inferred.

The misalignment that comprised the generation capacity far exceeding actual needs and heavy import reliance for fuel had led to an excess investment of approximately $4.48 billion in the sector.

Taking advantage of guaranteed payment such as capacity charge, the capacity market was flooded with over supply through unprecedented corruption. The total capacity or rental payment to private sector from 2010–11 to 2023–24 was approximately Tk 1.15 lakh crore. The overall plant factor of the total system varied between 42 per cent and 46 per cent in the last five years.

A 65 per cent plant factor is achievable by minimising maintenance, reducing standby capacity and full supply of fuel. The rental plants that were awarded in 2010–11 made as high as 35 per cent profit against a standard 15 per cent.

Another instance of the government favour awarded to allies was the tariff given to the 200MW unsolicited Teesta solar plant of Beximco, awarded in 2016. It was granted a tariff of $0.015/kWh in 2023, whereas all other plants were offering $0.010/kWh due to reduced panel costs and much higher efficiency.

The situation was no better in the gas sector.

Since September 2020, Rupantorito Prakritik Gas Company Limited bought 74 LNG cargos through 100 tenders through 12 companies though 23 companies were enlisted. Out of the 12 companies, three companies received orders for 59 cargos, indicating preferential treatment or collusion. Even a few cents overpricing in the unit gas price would net millions of dollars for the unscrupulous parties, the whitepaper said.

Until August 2024, 69 cargos of 225.4 million MMBTU LNG were imported from the spot market at an average cost of $16/MMBTU totalling $3.6 billion. A 50 cent kickback would net more than $100 million.

Under Hasina’s leadership, the energy adviser, state minister Nasrul Hamid Bipu, and the power division were the conduit of corruption. Every single deal from a small solar plant to a mega project like Adani was approved by the Prime Minister’s Office.

Now 65 per cent primary energy needs to be imported at an annual cost of $10 billion, and by 2030 this will rise to $20 billion.

The whitepaper called the Rooppur nuclear power plant a misadventure. In comparison, India’s nuclear power unit cost is $3,350/kWe, while the unit cost for Rooppur stands at $5,500/kWe. The national grid is not even ready to handle nuclear power.

The white paper advised that the government to explore renewable energy seriously through 2030 to relieve some of the burden. Gas exploration has also been emphasised to bring down energy costs.

News Link: Energy sector destroyed to benefit AL cronies