Jagorometer Analysis

Since coming to power in January 2009, the Awami League led coalition has undertaken a number                                                                           of initiatives to expand electricity generation capacity of the national grid. The undertow of the                                                                                   dichotomy of electricity generation lay between the distribution of power between urban and rural,                                                                           industry and commercial, east and west, with the overarching spectre of rich and poor. The                                                                                     macro-economic issues which has shrouded this manifesto area has been the adoption of a                                                                           national coal policy, the production sharing contract for off-shore gas exploration and existing                                                                                   distribution of fuel, namely gas.

At the outset of the year, the Bangladesh Petroleum Corporation had taken steps to reduce the                                                                                 price of kerosene and diesel in order to support the agriculture sector and support farming output.                                                                    The government also dropped all duties on renewable energy equipment in line with ‘Renewable                                                                              Energy Policy Bangladesh’ and agreed to initiate all previously planned power generation plans                                                               under both AL and BNP governments. The State-owned petroleum company, PetroBangla created a 'Gas                                                                   fund' from the increase in gas price, to be used by State energy companies for extraction and                                                                           exploration of new gas sites. In the government’s proposed national coal policy, the                                                                               displacement of peoples affected by open-pit mining shall be compensated and relocated at the                                                                     expense of the State.

The Gas Transmission Company Ltd (GTCL) proposed to enhance the capacity for transporting                                                                             gas throughout Bangladesh without which the country will face severe distribution and power                                                                           generation problems for the next two years. At several instances the government diverted power                                                                                from State owned urea and fertilizer plants to the national grid in order to provide additional                                                                                       electricity for agriculture output. In order to conserve energy and maximize the supply of electricity of                                                                         the national grid, the Government decided to introduce Daylight Savings Time which meant in June                                                                          2009 Bangladesh remained seven hours ahead of Greenwich Mean Time. In order to improve                                                      efficiency within distribution and replace aging power stations the Power Development Board decided to form                                                                   partnerships with private sector firms.

The government has initiated talks with the Russian Atomic energy commission to develop the Roopur nuclear power plant for electricity generation with a MoU between the two governments signed and discussions underway. The government has undertaken a multilateral approach to the power generation through the proposal for the creation of SAARC power grid, which will harness the comparative advantage to power generation in each SAARC country. This will include hydroelectric power in Bhutan and Nepal and improved power distribution in NE India and eastern divisions of Bangladesh.

The Power Development Board has failed to undertake the necessary steps to evaluate the proposals for the construction of power stations. There is implicit suspicion that parliamentarians and incumbent party officials are slowing down the process in an effort to extort favors from both government and the applicants.

The government has undertaken numerous steps to develop the necessary platform to begin work of increasing the capacity of the national grid. For a number of political, economic and technical factors the issuance of contracts has been delayed which is reflective of governance in Bangladesh. The government has not fully adhered to the Public Procurement Rule 2008 which undermines indicators of good governance and provides the foundation for leakage and misappropriation. The space created for complacency will further encourage procurement of poor quality equipment and eventually unsustainable long-term development. The government is moving in the right direction but it needs to pick up speed in order to achieve the goal of expanded power generation by 2013.

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