CPD demands review of agreements inked under special laws
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Photo: The Center for Policy Dialogue (CPD)
The Center for Policy Dialogue has demanded the repeal of the Special Act on Electricity and Energy Supply and review of the contracts executed under that Act.
Research Director of the Center for Policy Dialogue Khondoker Golam Moazzem claimed this at a press conference on Sunday (August 18).
In 2010, the government enacted the 'Provision of Rapid Supply of Electricity and Energy (Special Act) Act' to deal with the power and energy crisis. Initially the Act was made for two years, but later it was extended for 2 years in 2012, 4 years in 2014, 3 years in 2018 and finally 5 years in 2021. Section 9 of the Act states, 'No question shall be raised before any court about the validity of any act, action taken, order or instruction given or purported to be done under this Act.'
He also said that the CPD has urged the interim government to adopt a 100-day special action plan to continue the development of the power and energy sector along with the implementation of the ongoing projects. At this time, it is said that PDB is losing more than Tk. 45 thousand crore annually to buy electricity at high price and the outstanding bill to private companies is Tk. 45 thousand crore.
Moazzem said, under the contract with the private power producers, the company has to pull an additional burden of Tk. 37 thousand 93 crore annually to pay the capacity charge. The interim government must first focus on major reforms in the country's power and energy sectors. As part of these reforms to remove all forms of discrimination and ensure transparency and competition in the procurement process, the Electricity and Energy Fast Supply Special Act 2010 must first be repealed.
"The next step should be to renegotiate with private power producers to reschedule their tariffs, especially companies that have long-term power purchase agreements with the government and have passed a critical minimum period," he said.
The CPD Director said that the third step should be to cancel the Letter of Intent (LOI) with the companies that were unduly selected for the power purchase agreement. According to the No Electricity, No Pay, contract revision in the power sector, subsidy pressure will be reduced. We also feel that the customer does not have to pay extra.
Demanding the closure of liquefied natural gas (LNG) based power plants in the press conference, he said that we have to move away from LNG and coal based power plants and move towards renewable energy based power plants. LNG related projects in ADP need to be reconsidered.
He said, "We cannot give work to the right organization in the case of electricity tenders. As a result, additional bids have to be given to the bidders. Due to this increased bidding, the subsidy in the power sector increases. Apart from this, there is an agreement with the power plant (Rental) in such a way that they have to pay even if they do not provide electricity. As a result, the subsidy is increasing. According to the No Electricity, No Pay, contract revision in the power sector, subsidy pressure will be reduced. We also feel that the customer does not have to pay extra.
He also said, these things are not possible at this moment. We are not saying to do it now. However, the CPD wants that no new contract should be signed or renewed from the front. There should be changes in the leadership of various organizations in the power and energy sector. Sustainable energy transition should emphasize the use of renewable energy instead of fossil energy.
He said, in 2041, the demand for electricity may be 27 thousand megawatts, with a reserve margin of 35 thousand megawatts. But the power sector master plan has set a target of 58,000 megawatts, which is unreasonable. So we think it needs to be amended.
Bangladesh Power Development Board (PDB), Bangladesh Petroleum Corporation (BPC) and RPGCL have demanded to re-audit the financial reports of the last few years of various organizations in the power and energy sector, to give Bangladesh Energy Regulatory Commission (BERC) an opportunity to work independently to increase accountability in the energy and power sector. .
Pointing out 17 reform proposals for this sector, he said, 'Changes should be made in the leadership of various organizations in the power and energy sector. Sustainable energy transition should emphasize the use of renewable energy instead of fossil energy.
