PM Hasina uneasy with Energy bosses



Coalminer's son

“What you said in April you are repeating in August. Where is the progress?” asked Prime Minister Sheikh Hasina in her fourth meeting with power and energy sector officials since assuming office. She incidentally is also in charge of the Ministry of Power, Energy and Mineral Resources. While it’s true that her government inherited a crisis-struck power and energy sector, the situation has, nevertheless, barely improved in the 20 months of her government’s 60 month tenure.

Prime Minister Hasina has repeatedly expressed her concern about the continued abysmal performance of the sector, insisting that required projects be expedited and that people must not be made to suffer any more.

Her government started its tenure with a massive pledge to balance out demand and supply in the energy sector. A US-educated, controversial bureaucrat was preferred over senior party politicians to look after this vital as advisor, senior management was replaced by party-favored professionals, and mega projects were thrown away in the wake of an emerging energy crisis. Realizing the depth and diversity of the crisis, the people of Bangladesh initially sympathized with the government.

The caretaker administration had signed contracts for a few contingency power plants, some of which came into operation. But the Awami League government has in the 20 months of its rule failed to initial any contract for the establishment of new power plants. The government claims that it has added 800 megawatts of power to the national grid since taking office. If it’s true then where has that power gone? In 2009, national generation was 3800 megawatts while the present output is barely above it. It appears that old, retired power plants have neutralized any new electricity generation.

Moreover, gas crisis in the country has rendered around 800 MW unutilized, while another 800 MW of power generation remains out of use because of overhauling. Based on these calculations, the electricity demand of 6,000 MW faces a deficit of about 2,000 MW, making it the most severe crisis in the history of Bangladesh.

Despite such a bleak reality, our policy makers in the power and energy sector continue to claim that Bangladesh will be load-shedding free by 2012. It is quite logical to assume that a management which in 20 months failed to show any significant progress cannot do so in 20 years. PM Hasina is unnecessarily persisting with this failed management. Why is she not taking advice from serious experts? What happened to coal mining and offshore gas exploration?

The only notable action by this government is the signing of several contracts for importing liquid fuel. Some of these are on track but most have already fallen behind schedule. These expensive plants cannot be relied on for much longer. Bangladesh can ill afford to pay huge subsidies indefinitely. Even if a contract for setting up a major base-load power plant is signed today, financial closure by developers alone will take 6 to 9 months. That means such a plant may not come into operation within the remaining period of the present government, leaving the power sector virtually captive to contingency plants.

This government signed an agreement with India for grid connectivity and power import, but the tariff has not been decided yet. Even if things progress on war-footing 250 MW of power will enter the national grid by 2013. By then the shortfall is likely to go beyond the present 2,000 MW. Imported power will meet only a minor percentage of the deficit.

There is a plan to set up two large coal-fired plants in Khulna and Chittagong. Talks between NTPC India and PDB Bangladesh have come to a stalemate. India wants absolute control of the management and operation of the power plants, but can a sovereign Bangladesh allow any foreign government-owned entity to have that? Moreover from techno-economic point of view, power plants based on imported coal are never a feasible option for several reasons like lack of an enabling infrastructure for coal import, costs and poor domestic power tariff. So power plants run on imported coal are an unrealistic venture.

The government is equally unrealistic in its plan to import LNG. It will require huge investment and significant time as well as a very strong management to make the LNG dream come true. The target of 2012 is also an impossible deadline. At least two years will be required to construct sub-pipelines. Along with floating LNG terminals, offshore pipelines and high cost of importing LNG it will be impossible to realize this dream in just 28 months. But unfortunately the government still believes in fairly tales.

The most comical aspect of our energy policy came up during the last meeting when the gas sector management talked about 2,400 MMCFD additional gas productions by 2015. In 20 months we have only had some additional gas from Chevron-operated Bibiyana gas field. The present government can take no credit for it: this gas field development started during the tenure of four-party alliance and was completed at the time of the caretaker government. In fact the present government’s failure to select Pipeline Compressor Stations so far has impeded the utilization of stranded gas in Sylhet. The government also entered into controversy by permitting Chevron to build a mid-stream pipeline compressor station at Muchai Rashidpur. In Titas and Habiganj gas fields, workovers have only managed to restore earlier production capacity.  Gas production in Beanibazar, Rashidpur and Shangu has already been run out of steam. The government also has failed to carry out routine maintenance of transmission pipelines, while attempts to utilize additional gas through capacity saturated pipelines have triggered low pressure in the system. Shameless, Petrobangla continues to talk big.

Re-exploration in Sreekail and development of Semutang remains to be done. Workover in Meghna and development of Salda may provide us with some additional gas. But we have no reason to be optimistic about Sundalpur or Kapasia exploration as yet. Wonder why Bangladesh is not resolving disputes with NIKO to bring Feni and Chatak into full operation and explore Tenratilla soon?

Cairn/Santos JV is waiting anxiously with everything ready to commence drilling at Shangu with a plan to add about 50 MMCFD by April 2011. But delayed decision-making is about to postpone the drilling program. Why is bureaucracy being allowed to stagnate such positive initiatives? Is there a hidden reason for this? We must realize the overall economic impact of 50 MMCFD additional gas to the Chittagong market.

Again, why is coal policy approval taking so long? Why a coal policy is at all needed to start mining? Why can the prime minister not allocate time to finalize coal mining strategy? All stakeholders are urging the government to start coal mining without delay, so why this hesitation by a democratic government to explore and exploit our own resources in the most economic way?

PM Hasina can lambast her officials, but she cannot also deny her own failures here. Her advisors and secretaries are taking the nation for a ride. We are running out of patience. The prime minister must set deadlines and milestones, and there must be punishment for failures. The energy crisis alone might be enough to bring down the curtain on this government earlier than its time.

PM Uneasy with Energy Bosses

One Response to “PM Hasina uneasy with Energy bosses”

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    ” the electricity demand of 6,000 MW faces a deficit of about 2,000 MW, making it the most severe crisis in the history of Bangladesh.” – I am bit confused how this demand thing is calculated. When only about 33% of the population has access to electricity,hundreds of thousands of apartments are being built, rapid industrialization is required to generate employment, this demand of 6000 MW sounds like a joke. Will appreciate if someone who has expertise on the field can shed some light on it.

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