Economic toll starts to pile up as pylon building hits snag

The slow pace in transmission tower construction in the turbulent river Padma costs the authorities concerned valuable time and more likely a large chunk of public fund, which is literally going down the drain.

Entrusted with the task of building pylons that will carry the power line through the waterbody, the Padma Bridge authority has thus far failed to hit the mark.

Source said the delay will deprive people of reaping full benefits from the coal-fired power plant in Payra for two and a half years and will cause the authorities to pay around Tk 4,000-crore capacity charge.

Last year, Bangladesh Power Development Board spent Tk 1,900 crore on the demand charge, and more is to follow, which will bring the power sector under an added pressure of unreasonable subsidies.

Besides, Bangladesh-China Power Company limited, the operator of Payra Power plant, is also on a losing streak.

“We are under pressure as the government does since we have a pressure to repay the loan, operation and maintenance costs. The machines are not running at full capacity, so is less power generation,” Payra Power Plant Project Director Shah Abdul Moula told The Business Post.

“The projects are foreign-funded. Therefore, there is a need for extra effort and sincerity.”

The 1,320MW Payra power plant was officially launched on March 21. On the day of inauguration, the government declared 100 per cent electrification for the country.

The Power Division also won Independence Award this year for its feat.

However, energy expert Professor Shamsul Alam told The Business Post that the government failed to make progress in power transmission, but at the same time, it is spending hundreds of crores of taka every year in the name of setting up additional plants.

“This money is going into the pockets of businessmen closely affiliated with the government. Once the Payra plant is fully operational, the additional plants will no longer be in use,” he said.

PGCB blames Padma Bridge authority

Since the construction of Payra power plant in 2016, work on drawing double-circuit transmission line from Aminbazar in Dhaka to Mongla in Bagerhat also got underway.

The Power Grid Company of Bangladesh (PGCB) was tasked with the construction, the estimated cost of which was worth Tk 2,505 crore.

“Our failure did not delay work. We will get it done within the next six months. Three towers have so far been completed,” said PGCB Project Director Morshed Alam Khan.

Asked about it, Padma Bridge Construction Project Director Abdul Quader said Padma is a fast-flowing river; nothing can be done here accordingly as planned. He attributed the procrastination to lack of “hammer” that belongs to Germany only, but that moved to America during the pandemic – all that led to an unwanted delay.

“We will explain to PGCB about the status of construction work by next June.”

However, Morshed Alam Khan said even in June work cannot be done since it is rainy season then.

“There will be lots of lightning and it might take another year more,” he apprehended.

PDB counting loss

The Payra power plant is currently generating 660MW of electricity which is half its capacity, but has to pay the charge at the rate of full capacity power generation which is 1,320MW.

In last year alone, the PDB had to pay a capacity charge of Tk 1,900 crore.

To seek comment from PDB Chairman Mahbubur Rahman, several attempts were made to dial his cellphone number, but to no avail. Mahbubur did not pick up his phone.

However, another PDB official told The Business Post on condition of anonymity that Bangladesh-China Power Company Limited (BCPCL) has to be paid a capacity charge of around Tk 115 crore per month.

Of this, the PGCB is paying Tk 20 crore in compensation because it could not build the transmission line within the stipulated time.

The Institute for Energy Economics Financial Analysis, a US-based research institute, said in its report last year the government was subsidizing the power plant by Tk 9,000 crore a year without having any electricity.

BCPCL under pressure to repay loan

The Ministry of Power, Energy and Mineral Resources has spent a total of $ 2,480 million on the Payra power plant, with 80 per cent of the loan provided by Exim Bank of China and the rest collectively by CMC, a Chinese state-owned company, and North West Power Generation Company Limited, a state-owned company of Bangladesh.

According to the agreement, Exim Bank’s loan installments have started six months after the construction of the project. It has to be repaid $ 2.5 billion with interest in 22 installments for 11 years.

PD Abdul Moula said they are under pressure to repay the loan for power plant which is far from using full capacity.

“If it had been fully operational, we would have been able to sell electricity and pay loan installments. Failure to pay an installment for any reason will shoot up the loan interest,” he explained.

“The fact of the matter being we will turn defaulter which will ruin our image.”