Energy Bangla

Ten private power companies are taking about Tk 113.33 crore every month in rental charges at a rate which is about 95 per cent of the charges they have realised during the original contract period for their 15 rental power plants.
Monthly rental charge is given to the private power suppliers by the state-run Power Development Board in addition to the power tariff to enable them to realise the investment and a portion of the maintenance cost, board officials said.
The board paid the companies more than Tk 6,203 crore in rental charges against the 15 plants with a combined capacity of 931MW at an average rate of Tk 666 crore for every 100MW capacity during their original period of contracts spanning three to five years, according to power board data.
The 15 plants were installed between 2008 and 2012 when the installation cost of gas turbine (simple cycle) power plants varied from Tk 320 crore to Tk 400 crore for every 100MW capacity, he said.
Rental power companies continued to realise about Tk 636 for every 100MW generation capacity as rental charges during the extended contract period.
The government extended the power purchase deals with the 10 rental power companies between 2013 and 2015 for three to five years under the Speedy Supply of Power and Energy (Special Provisions) Act 2010 allowing them to realise Tk 5,924 crore in rental charges.
Experts said that consumers were burdened with power price hike and subsidy from the public exchequer because of the high rental charges.
Consumers Association of Bangladesh energy adviser M Shamsul Alam, also an electrical engineering professor, said that the extension of the contracts was an anti-people move from the government side having no legal or rational basis.
State minister for power, energy and mineral resources Nasrul Hamid told  that he was not aware of the amount of rental charges during the extended contract period.
He said that he would look into the matter.
The government’s dependence on rental power suppliers had increased the cost of power generation and that prompted the Bangladesh Energy Regulatory Commission to raise the bulk price of electricity by approximately 107 per cent between March 2011 and September 2015.
A high official of a local power supplier admitted that realisation of 70 to 100 per cent of the investment in three to five years from the rental charge alone should have made a business much profitable during the original contract period.
He also said that the rental charge considered in the extended contracts would enable the private power suppliers to bag approximately Tk 350 crore in extra profit against every 100MW capacity.
Shamsul Alam said that the government had extended the contracts for the benefit of some private companies and ignored the interest of the consumers.
‘It is a fact that the most of the rental power suppliers failed to realise their investments from the rental payments they received in the first contract period as “inexperience” caused them to pay significant amount of penalties,’ said former Power Cell director general Mahboob Sarwar-E-Kainat.
He, however, the rate of rental charges fixed in the extended contracts is exorbitantly high, he said.
The original records and books used in recording business transactions of the companies should have been examined during negotiations for extending the contracts, he said, adding that the rental charges could be 30-40 per cent of the rental charges fixed in the original contracts.
Netherlands-based Aggreko International Projects Ltd had realised Tk 2,330.85 crore in rental charges in the first 3-year contract period for its three plants with a combined generation capacity of 285MW. With the extension of the contracts for three to five years, it would also realise Tk 1,608 crore in rental charges.
DPA Power Gen Int Ltd had realised Tk 283.13 crore in rental charge for its 50MW diesel power plant during the contract period 2010-13. A 5-year extension enabled the company to realise Tk 494.4 crore in rental charges.
Desh Energy had realised Tk 545.76 crore in rental charge for 100MW diesel power plant during 2011-14 contract period. A 5-year extension enabled it to realise Tk 909.6 crore more.
Max Power had realised Tk 688.87 crore in rental charge for 78.5MW gas-fired power plant during 2011-14 contract and a 5-year extension enabled it to realise Tk 565.2 crore more.
United Ashuganj Power Ltd had realised Tk 448.15 crore for 53MW gas-fired power plant during 2011-14 contract period and a 5-year extension enabled it to realise Tk 381.6 crore more.
Energy Prima Ltd had realised Tk 720 crore in rental charge for its four gas-fired power plants with combined generation capacity of 170MW during the first 3-year contract period. A 3-year extension enabled it to realise Tk 494.4 crore more.
Precision Energy had realised Tk 312.68 crore in rental charge for 55MW gas-fired power plant during 2010-13 contract period and 5-year extension enabled it to realise Tk 369.6 crore more.
Venture Energy Resources Ltd had realised Tk 198.72crore in rental charge for 34.5MW gas-fired plant during the first 4-year contract period till 2013 and 5-year extension enabled it to realise Tk 284.4 crore more.
RZ Power Ltd had realised Tk 204.11 crore in rental charge for its 50MW diesel-fired plant during 2010-13 contract period and 5-year extension would enable the company to realise Tk 208.8 crore more.
Energies Power Corporation had realised Tk 470.25 crore for its 55MW furnace oil-fired plant during 2008-13 contract period and 5-year extension enabled it company to realise Tk 446.86 crore more.