Finance Adviser Dr. Salehuddin Ahmed said that despite the International Monetary Fund (IMF) making various alarming statements, the country’s economic situation is not that bad, but there are challenges.

He said this while talking to reporters at the Secretariat on Thursday (December 19).

The adviser told reporters that despite your IMF delegation making various alarming statements, the country’s economic situation is not that bad, but there are challenges.

Earlier, at a press conference, IMF delegation chief Chris Papageorgiou, who is visiting Bangladesh, said that the economic picture of Bangladesh is not very promising. Inflation has not been under control for a long time, which is much higher than the IMF’s assumption.

He expressed concern over the continuous increase in food prices in the Bangladesh market. For this, the organization has advised the interim government to take effective initiatives to reduce commodity prices.

At the same time, Economic Adviser Dr. Salehuddin Ahmed said that no money will be allocated to pay wages to Beximco Group workers.

He said, it has already been decided that no money will be given to pay the wages of the group's workers. He further said, earlier, money was given to the wages of the Beximco Group workers. That money has also been transferred to the workers' bank accounts. If it was not given, they would have blocked the roads.

Earlier, the companies in the Beximco Industrial Park were laid off due to lack of orders and sufficient loan defaults in the name of the company in the bank.

Meanwhile, Energy and Power Adviser Fawzul Kabir Khan said that the government will approve new gas connections for industrial plants if they agree to pay a bill equal to the cost of LNG import. 

The International Monetary Fund (IMF) has said that the economic picture of Bangladesh is not very promising. Inflation has not been under control for a long time, which is much higher than the IMF's expectations.

Chris Papageorgiou, head of the organization's delegation visiting Bangladesh, said this at a press conference held at the Ministry of Finance on Thursday (December 19).

The International Monetary Fund (IMF) has expressed concern over the continuous increase in food prices in the Bangladesh market. For this, the organization has advised the interim government to take effective initiatives to reduce commodity prices.

Chris Papageorgiou believes that the reserve situation is also under pressure. He said that the Bangladesh economy is under pressure from inflation. Due to this, growth will decrease. Revenue collection has also decreased.

The IMF has also expressed concern over the printing of new money and its release into the market. However, the organization believes that the Governor of Bangladesh Bank has said that they will quickly withdraw the money they have released into the market. However, if it does not do so, inflation will increase further, which will further increase the suffering of the common people of the country.

Chris Papageorgiou said that Bangladesh will receive 645 million dollars in the fourth tranche by the end of February, and the same amount will be received in the fifth tranche. The IMF will conduct the fourth review in March or April before releasing the tranche.

He said that due to floods and student uprisings, GDP growth in the current fiscal year may be 3.8 percent. However, GDP growth is expected to increase to 6.7 percent in the 2025-26 fiscal year.

He said that Bangladesh has requested an increase of another 750 million dollars in the size of the ongoing loan program, and he said that 645 million dollars will be given to Bangladesh in the fourth tranche under the ongoing loan program.

Bangladesh has fulfilled the IMF's conditions regarding reserves. The amount of net reserves stands at 15.58 billion dollars. 

Agrico International's Ghorashal 145 MW power plant has beaten gambling in terms of profits. It has earned 21 crore 14 lakh 10 thousand dollars in capacity charges (rent) by investing 10 crore dollars.

The Power Development Board (PDB) extended the time and money under a special law in the middle of the company's open tender for the power plant. The capacity charge was set at 21 dollars (per kilowatt) in the open tender for a 3-year contract. The diesel-based power plant was approved for dual fuel (diesel and gas) after a year and a half. And here the company, in collusion with the Power Development Board, fired cannon. The capacity charge was increased from 21 dollars to 30 dollars. The capacity charge was supposed to decrease if the rental period increased, but in Agrico's case, the opposite happened. The company's profit was the main focus in the contract, not the state's interest. And this is how the company was able to earn several times more money.

According to the Power Development Board (PDB), according to the first agreement, the capacity charge had to be paid every month at 30 lakh 45 thousand dollars. Accordingly, the capacity charge for 36 months was calculated at 10 crore 96 lakh 20 thousand dollars. In these rental-based power plants, the cost is determined based on the investment and operating costs in the first agreement. But in an unprecedented way, the capacity charge and the contract period were extended by 18 months under the Special Provisions Act.

The mysterious company could not stop here, after the end of the 4 and a half year period, a contract was signed for another 3 years. This brought the total capacity charge to about Tk. 2.5 thousand crore. And the company's initial investment was only about Tk. 700 crore. It earned Tk. 1800 crore from one power plant. However, at that time, setting up a base load power plant would have cost Tk. 900(6 crore megawatts). If such a power plant were built, uninterrupted power supply for 20 to 25 years would be available at that cost.

The Power Development Board's 2011-12 annual report states that the price of each unit of electricity from the Ghorashal Power Plant in that fiscal year was Tk. 12.95. At that time, the cost of generating electricity with gas was less than Tk 2. That year, the cost of buying electricity from the Ashuganj Power Station Company located in the same area was only Tk. 1.92, while the cost of buying electricity from the Electricity Generation Company was Tk. 1.51. In other words, the fact that the price was several times higher was an open secret. Yet, the PDB has repeatedly extended their contracts. It is said that the high-priced contracts were initiated through Agrico. Later, other companies also got them.

Muhammad Fawzul Kabir Khan, Advisor on Power, Energy and Mineral Resources, said at a program that instead of walking the path of sustainable development, the main goal of the previous government seemed to be to provide opportunities for corruption in the power and energy sectors.

Many have commented that the Agrico International incident could be a prime example.

Although there have been various cases of looting in electricity, the incident of increasing capacity charges after the agreement is unprecedented. There are various rumors about this agreement by the UK-based company Agrico International. The ownership of the company is shrouded in mystery.

Infradev Associates Limited has worked as the local agent of the company in Bangladesh. It is owned by Sarafat Chowdhury Sadi. The expatriate Bangladeshi former secretary It is said that he is a distant relative of Dr. Sadat Hossain. He used to introduce himself as a relative of Toufiq e-Elahi Chowdhury. Many demands of the PDB would change due to his power. He used to address the senior officials of the PDB and the power department as Tumi. Although many were embarrassed, they did not dare to open their mouths due to their closeness to Toufiq e- Elahi Chowdhury. It is said that Toufiq e-Elahi Chowdhury himself used to get a share of the excess profits of the power plants which may have taken him beyond the borders of the country.

After that power plant, Agrico International was given two more power plants. These are the Brahmanbaria 85 MW power plant in 2011, and another Ashuganj 95 MW power plant came into production on May 31, 2011. It also received a license for three years. However, after several extensions of the contract period due to the touch of invisible magic, the two power plants ran for a total of eight years. The capacity charge of these power plants was set at 30 dollars. About Tk. 1500 crore against the Brahmanbaria 85 MW power plant, and about Tk. 1300 crore against the Ashuganj 95 MW. The PDB paid a capacity charge of about Tk. 2700 crore against the two plants.

These unequal contracts have an impact on the average cost of electricity generation. According to the Bangladesh Power Development Board (BPDB), the average cost of generation is below Tk. 2, but it has skyrocketed in a few years. In 2022, the average production cost has reached Tk. 11.51.

Muhammad Fawzul Kabir Khan, Adviser on Power, Energy and Mineral Resources, said, "We are selling electricity at an average rate of Tk.8.95 per unit, and buying it at Tk. 12 to Tk. 25. Why was it bought at a higher price, who made the contract, why did they do it? Didn't the businessmen of Bangladesh think at the time that they were doing business, why are they taking it at such a high price, will they compensate the nation?

An attempt was made to talk to Sarafat Chowdhury Sadi, the Bangladeshi agent of Agrico International. His phone was found switched off, and there was no response even after sending a message on WhatsApp.

Sarafat Chowdhury Sadi's younger brother, Robin Chowdhury, Senior General Manager of Infradev Associates Limited told Barta24.com, there were no irregularities in getting the power plant. Everything that happened was done according to the rules.

When attention was drawn to the increase in the price and time while the contract was ongoing at an open price of 21 dollars, he said, I cannot say anything about this. You contact PDB.

When his attention was drawn to the rumor of family ties and partnerships with the Awami League government's adviser on power, energy and mineral resources, he said, those who said these things did not know and spoke wrongly. Agrico did business according to the rules.

Those involved in the energy sector believe that if Sarafat Chowdhury Sadi, his company and close associates are arrested as bank accounts, the big secret of money laundering may come out. Many big shots may be involved in this.

A total of Tk. 52 thousand crore is being provided as subsidy in the electricity and energy sectors, the per capita subsidy is Tk. 3 thousand. It is not possible to provide a subsidy of Tk. 32 thousand crore in the electricity sector annually, said Adviser on Power, Energy and Mineral Resources Dr. Fawzul Kabir Khan.

He made this comment at a seminar on fuel prices and supply assurance at the DCCI Auditorium on Saturday (December 7).

He also said, we are selling electricity at an average rate of Tk. 8.95 per unit, and buying it from Tk. 12 to Tk. 25. Why was it bought at a higher price, which made the contract, why did they do it! Businessmen who have done business in Bangladesh, didn't they think, why are we charging such a high price, will they compensate the nation.

He said, it is not possible to provide a subsidy of Tk. 32 thousand crore for electricity, the old idea is that IPP power plants will not be built anymore. We are moving towards merchant power plants, you will build the power plants yourself, you will decide the customers and the price yourself, you just have to inform BERC. There will be an option to buy 10-20 percent from the government, so that there is no financial risk.

Competition has been banished; you were introduced to that and got the power plant. Now that opportunity is gone, there will be no purchase without an open tender. We have already started reaping the benefits of it. Earlier, only four or five companies used to participate in BPC's imports, earlier the condition was to have a refinery, the condition has been relaxed and it has been said that it will be only for large suppliers. We are getting 12 people instead of four or five people, which have saved 32 percent. We have opened up LNG. They were left in a suffocating state with closed windows and doors, we have opened everything, if you are a good businessman, you will be able to do business here. There will be no need for any introductions here, he commented.

He said, currently the daily demand for gas is about 4 thousand million cubic feet, we are supplying less than 3 thousand. There is a deficit of about 1 thousand here. There is surplus gas in Bhola, only one company was given to convert it into CNG. We will open it up; from there you can convert it into CNG or LNG. Tenders will be floated for 40 solar power projects in phases. There is a lot of waste land of various government agencies. We will provide land, line it, you just come and do the project.

Regarding strengthening oil and gas exploration, he said, 48 well drilling projects are underway. 100 more will be done in the next 2 years. Expressing some regret over bureaucratic complications, he said, I was once a bureaucrat, now I have to fight with my own shadow. If it exceeds a certain amount, a third-party consultant will have to be appointed, which will take 1 year. However, the third party has no information. I have given a semi-official letter, Petrobangla will do it itself. That saves us money and time. He also called on businessmen to raise their voices here.

The adviser said, you are making allegations against the ministry, your allegations are true, the ministry has failed to do the work. We have to make arrangements so that we cannot say these things when we meet again.

DCCI President Ashraf Ahmed said, if we need energy, then there is no alternative to import, price dependence, I can ensure its economical use. Along with imports, we have to increase the use of our own resources. We are able to use a small amount of the potential of coal resources and solar power. We need to consider how appropriate the use of gas for fertilizer production is, there are many alternatives to gas in fertilizer production, we should go in that direction.

Energy expert Dr. M. Tamim presented the key-note paper and said, it is not possible to dictate the price of energy in any way, the price of energy has never been right in the long term. The cost of generating electricity per unit (2023-24) is Tk. 11.51, and it is being sold (wholesale) at Tk.7.02. Again, there is a shortage in gas prices. A sector cannot run with such a shortage. Due to the increase in the price of the dollar alone, the price of coal-based electricity per unit has increased from Tk. 6.5 to Tk. 9.17.

Dr. M. Tamim said in his recommendation that the price of electricity coming from India other than Adani is much lower. The average cost of coal-based power plants produced in Bangladesh is Tk. 12.46 and at the same time Adani has to pay Tk. 14.83 taka. Why will it cost more, that agreement should be reviewed? The average price of solar power is Tk. 16.48, those agreements also need to be reviewed.

To reduce load shedding of electricity, change office hours and close the market by 7 pm during the summer, if necessary, run until late on Fridays and Saturdays. Export boosted electricity to Nepal in winter. Work jointly with foreign companies on land to meet the gas crisis, reduce gas system losses.

He said that the gas crisis could become more pronounced. Preparations should be made for this. More FSRUs will be needed.

Energy expert Dr. Badrul Imam said that there is no shortage of gas here, if proper exploration was done, we would not have to talk about the gas crisis today. But unfortunately, no government has done any intensive exploration activities. We have always focused on imports. I can guarantee that if we had worked that way, we could have moved towards gas exports.

Energy expert Dr. Ijaz Hossain, President of Bangladesh Solar and Renewable Energy Association Engineer Nurul Akhter, Vice Chairman of Confidence Group Imran Karim, among others, spoke at the seminar organized by Dhaka Chamber of Commerce and Industries (DCCI).