Bangladesh-India Friendship Power Company (Pvt) Limited (BIFPCL) which is constructing the Rampal Power Station in Bagerhat has requested the National Board of Revenue (NBR) to allow its full-fledged commercial production from June 30, 2024, extending the previous deadline for one year to secure five types of tax benefits for up to 15 years.
According to the existing Statutory Regulatory Order (SRO), BIFPCL and coal-based power generation companies which would go into commercial operation after June 30 this year will not get tax holidays and other benefits.
“Impose of any non-IA tax without relaxing the provision would likely lead to an increase in the country’s electricity tariff and disrupt the economic growth,” said a letter sent recently to NBR Chairman Abu Hena Md Rahmatul Muneem signed by BIFPCL Managing Director Sayeed Akram Ullah.
Sayeed Akram Ullah has requested the revenue board to consider that Covid-19 and grid constraints in completing commissioning work have delayed the commercial production in due time.
The Rampal Power Station, also known as the Maitree Super Thermal Power Project is being set up by the BIFPCL which is a 50:50 joint venture between India’s state-owned National Thermal Power Corporation (NTPC) and Bangladesh Power Development Board (BPDB).
The 1,320-megawatt (MW) coal-fired power station is under development at Khulna division’s Rampal upazila which is the largest power plant in the country.
“Although the work of the Rampal Project started in April 2017, the project witnessed major obstacles during the Covid-19 pandemic. During the 1st wave of Covid-19, the Rampal project works remained completely halted for about 5 months and then it took another 2 months to resume the full-scale operations,” the letter stated.
“During the 2nd wave, also the mobilisation of foreign manpower to the site was stopped which also led to the cessation of various specialised tasks,” it added.
“Due to grid constraints in the completion of testing or commissioning work, the commencements of commercial production of power units have been delayed. The project-related and monitoring organisations are also aware of these delays,” it said.
According to the power plant officials, the first 660MW unit of the Maitri Super Thermal Power Project has been operational since December 2022.
Meanwhile, the Ministry of Power, Energy and Mineral Resources through a letter requested the NBR to extend the required duration for coal-based power generation companies to go into production till June 30, 2027, aiming to get tax exemption facilities.
“Due to Covid-19 and letter of credit opening difficulties for forex crunch triggered by the Russia-Ukraine war have caused the delay in implementation of the coal-based projects,” the letter reads.
Considering the electricity demand and fuel diversification, the ministry has requested the NBR to extend the obligatory provision for going into production for coal-based power plants by amending the SRO.
The ministry has proposed incorporating the signing agreement date till June 30, 2024, and the commercial operation date till June 30, 2027, for coal-based power plants to get an exemption facility.
Earlier on June 20 this year, NBR extended the tax exemption facility for private sector power generation companies till June 30, 2036, from December 2034 and the required period for power plants to go into production has been extended till June 2024 from December 2022 to get the tax exemption.
However, tax exemptions have been also given in several other cases but coal-based power generation companies will not get this benefit, said the SRO signed by the NBR Chairman.
