BCPCL again seeks dollar from Finance Ministry

The Bangladesh-China Power Company Limited (BCPCL) has expressed concern that power production at the coal-based Payra Thermal Power Plant in Patuakhali might be stopped as the supply of dollars, needed to purchase the coal, is not ensured despite repeated urges.

BCPCL again wrote to the Ministry of Finance on Sunday seeking the supply of dollars. Since January this year, several letters have been sent highlighting the dollar crisis.

The Business Post also obtained a copy of the letter sent by BCPCL Managing Director Engineer AM Morshedul Alam to the Department of Financial Institutions of the finance ministry and the Bangladesh Power Development Board.

According to the letter, BCPCL sought Tk 3,229 crore ($298 million) from the Bangladesh Bank for the payment of the dues of the coal purchase.

This Bangladesh-China joint venture company is unable to pay the dues of coal purchases from Indonesia due to the dollar crisis. As a result, BCPCL fears, coal imports will stop this month.

The letter said the amount of arrears is increasing day by day as BCPCL did not get the necessary foreign currency from Sonali Bank (BCPCL’s account bank) despite repeated requests.

If this arrear is not paid soon, the national economy will be threatened due to massive load-shedding in the coming summer and irrigation season, as a result of the shutdown of power production.

In this situation, the letter also informed that BCPCL will not be responsible if power production is stopped at the plant due to the lack of coal.

In this regard, China National Machinery and Export Corporation (CMC), which owns 50 per cent of the Payra power plant, said that the amount of arrear, for coal import, to PT Bayan Resources Tbk, an Indonesia-based coal mining company, is $298 million.

The CMC also said that if Tk 540 crore ($50 million) is provided every month, it will be possible to open letter of credit (LC) for the coal supply required by the power plant for the next month.

In the letter, the BCPCL also said that as per clause 8.2(c) of the implementation agreement with the shareholders of the company, Bangladesh Bank is supposed to provide the dollars needed to pay the outstanding bills for the purchase of coal.

Mentionable, the coal-based Payra Thermal Power Plant of Patuakhali is supplying electricity from two units with a collective capacity of 1,320MW. The plant built by BCPCL as a joint venture between Bangladesh and China supplies more than 1,200MW of electricity per day on average.

It is the largest power plant in the country in terms of power supply. Like the Rampal power plant, the Payra power plant is facing the same problem with the import of coal due to dollar-crunch.

According to BCPCL sources, they have been running the power plant for a long time purchasing coal on credit. Last January, the supplier company stopped the supply of coal. After that, the plant has been continuing production with stored coal.

In such a situation, the central bank arranged some dollars last February which enabled BCPCL to keep the plant running. Now the plant is under the pressure of new outstanding bills.

Payra thermal power plant’s first unit of 660MW capacity came into production on January 13, 2020 while the second unit started production on August 26 of the same year. If two units are operated at a time, 10,000 tonnes of coal is required per day.