Planning clears Tk 15,870cr cost escalation

The Power Division has sought a 3.5-year extension of the Matarbari coal-fired power plant project and increase the cost by Tk 15,870 crore or 44 per cent for constructing additional infrastructures.

A senior Planning Ministry official said that the division had sent the revised development project proposal (RDPP) to the Planning Commission for approval.

“The ‘Construction of 2X600MW ultra-supercritical coal-based power plant at Matarbari (1st Revision)’ is likely to get clearance in the next meeting of Executive Committee of the National Economic Council (ECNEC),” the official told The Business Post.

In the RDPP, the cost has been estimated at Tk 51,854 crore, of which Japan International Cooperation Agency (JICA) will provide Tk 43,981 crore while Tk 6,406 crore will come from the government exchequer and Tk 1,527 crore from the Coal Power Generation Company Limited (CPGCBL), the implementing agency of the project.

Initially, the cost was estimated at Tk 35,984 crore, of which JICA was supposed to provide Tk 28,939 crore, the government Tk 4,926 crore and CPGCBL Tk 2,118 crore.

The Power Division cited six reasons in the RDPP for increasing the cost and extending time, including developing a channel, jetty, land, civil works, setting up turbines, boilers, coal and ash handling, trial run, and rehabilitation. Besides, an increase in rural power and township construction cost also pushed up the overall project expenditure.

According to RDPP, an additional Tk 14,326 crore will be required to construct a 14.3km long, 350m wide and 18.5m deep channel, revetment, seawall and sediment mitigation dyke, and necessary infrastructure development of the project site.

As per the consultancy firm’s recommendations, using Cement Deep Mixing Method and Prefabricated Vertical Drain technologies for land development is another reason for increasing cost.

Security Module purpose will need an extra Tk 1,407 crore.

The project area of Matarbari and Dhalghata union parishads are under the Maheshkhali Upazila of Cox’s Bazar. Initially, it was supposed to be completed by June 2023, but if it gets a time extension, the project is expected to be finished by December 2026.

The Environmental and Social Impact Assessment and Feasibility Study were conducted in 2013-2014. Bangladesh and JICA signed a loan agreement on June 16, 2014.

A Japanese consortium of Sumitomo Corporation, Toshiba Corporation and IHI Corporation is constructing the power plant.

The project was initiated in July 2014. So far, 44.5 per cent physical and 47.76 per cent financial progress has been achieved.

Matarbari is one of the fast-track projects comprising two units for supplying electricity.

“We held a project evaluation meeting in June where we cleared it and sent for ECNEC’s approval. Some new components have been added to the project, and the cost of some existing components has been increased,” Sharifa Khan, member of Industry and Energy Division of Planning Commission, said.

Project Director Abul Kalam Azad told The Business Post that the inclusion of some components would push up the cost and time.

“The cost will mainly increase due to deep port development for easing ship movement,” he said.