Power sector: Ex-minister’s ‘friends and family’ in meter business

The ousted government of Bangladesh Awami League (AL) set a target of distributing over 45 million prepaid electricity meters among consumers. Six distribution companies started importing the meters in this regard as well, which created a scope of business involving several billions of taka.

A clique of “friends and family” of former former state minister of power, energy, and mineral resources Nasrul Hamid took control of the business.

Prothom Alo has collected information of procurement of prepaid meters by four out of six power distribution companies, including several local companies from the Registrar of Joint Stock Companies and Firms (RJSC). Data have been found regarding connection of the people close to the state minister with the companies.

Relevant officials of the companies and the people involved with the import of the meters informed Prothom Alo that some of the meters were procured through a direct buying method while some were bought through open tender.

However, there are allegations that the former state minister of power, energy, and mineral resources from his Baridhara residence in the capital used to fix the persons who would get the work. Then the company used to be given the work floating the tender.

Initiative to install prepaid electricity meters was taken in 2010 but the supply became faster after 2020.

Three Chinese companies - Shenzhen Star, Hexing and Wasion groups joined one of the cliques and supplied all the meters. There are allegations of money laundering against the clique in the name of meter-business as well.

An IT company, Oculin Tech BD Ltd., received the work permission of supplying meters to Northern Electricity Supply Plc. (NESCO) in 2019 though it did not have any such experience. They received the Tk 1.07 billion-work order along with China’s Shenzhen Star.

Later in 2021, they received another order of about Tk 920 million. With the help of the experience certificate from the NESCO, Oculin Tech BD Ltd. grabbed the work of supplying meters to the rural electrification board (REB), the largest power distribution company in the country.

A responsible source from NESCO expressed to Prothom Alo that the then power secretary Ahmad Kaikaus put pressure on the company to give the work to Oculin Tech. Later, Ahmad Kaikaus came close to Sheikh Hasina and was appointed as her principal secretary.

Prothom Alo could not speak to him regarding the allegations as he is abroad now.

Speaking to Prothom Alo about the overall situation, adviser to power, energy, and mineral resources Fouzul Kabir Khan said, “We know about cliques involved in the procurement of prepaid meters. Due to various allegations, the Asian Development Bank (ADB) at one stage stopped financing in prepaid meters as well.”

He further said the projects taken during the tenure of Awami League government regarding the prepaid meters are being assessed. No more chances will be given for forming any more cliques, he stressed.

The information provided by the Registrar of Joint Stock Companies and Firms (RJSC) says Shabad Sazid is the managing director of Oculin Tech. Relevant sources also said that K Rumman Akhtar from Hong Kong joined as the Chief Technical Officer (CTO) of this company. The two are friends of Sheikh Rehana’s son Radwan Mujib Siddique.

Basically, Oculin looks after the technical support and software for meter use. Through this they control the tender process. Even if someone outside of them wanted to participate in the tender process, Nasrul Hamid used to stop him by scaring him.

According to NESCO, the company distributed the meter supply work through seven tenders. Not more than two companies participated in any of these tenders.

China’s Shenzhen Star got work of Tk 5.5 billion through four tenders and Wasion got work of Tk 4.5 billion through three tenders. Oculin partnered with Shenzhen Star in two and Meter D Tech in two. The local representative of Shenzen Star in Bangladesh was late Mohammad Sujat Islam, elder brother of Nasrul Hamid’s wife.

After his death during the Covid-19 pandemic, his close relative Mahbub Rahman alias Tarun took charge of this. Wasion partnered in two tenders with Techno Electrical and in one tender SQ Trading. All the three companies are sister concerns of SQ Group, which is owned by Abu Zafar Mohammad Shafiuddin alias Shamim, a former Awami League MP. Wasion’s local representative is SQ Trading.

Several sources said that Shamim’s company was involved with others in the supply of much-talked-about business of supplying electric poles during the four-party coalition government led by the Bangladesh Nationalist Party (BNP).

In the January 2024 parliamentary election, he won for the first time with the boat symbol. Currently he is hiding.

NESCO managing director Zakiul Islam told Prothom Alo that there were no irregularities on paper in the procurement of meters. In the beginning, though each meter was purchased at the cost of US $41, including the licence fee of Oracle software, in the first three installments, in the next four installments each meter cost $35.

However, two NESCO officials informed Prothom Alo that NESCO’s estimated bid used to be conveyed to the company chosen by the state minister before submission of tenders, though this was supposed to be kept secret in competitive tenders. That is how they could become the lowest bidders.

Besides this, the two companies used to share the work manipulating the tender rate among them, as per the decision of the state minister. No one would submit tenders without the approval of Nasrul Hamid.

Authenticity of this allegation has been found to be true in the tenders floated during the interim government. In the first round, tenders to buy 800,000 meters were submitted on 24 October. Seven companies have participated this time. As of now, NESCO has distributed the work of supplying 1.45 million prepaid meters through seven tenders.

The ring mainly targeted the REB for meter business. The REB has more than 36 million customers. They are mainly from villages. The people in villages use less electricity. The REB supplies electricity through 80 associations. So far, some 14.7 million meters have been installed. Works are underway to install another 560,000 meters. The REB purchases the meters through different projects and distributes them among the associations.

The REB calls tenders in the name of these associations. The respective association pays for its part. However, there is discontent among the association officials over purchasing meters from the REB at a higher price.

Prothom Alo has information regarding the REB purchasing at an unusually higher price in the name of five associations in 2020.

Analysing the REB documents, it has been found that the agency called a tender to purchase 500,000 prepaid meters. This time too, only two tenders were submitted, both related to Shamim. The Oculin Tech BD Limited and SQ Wear and Cables got works jointly.

Vicker International, the other company which submitted the tender, is owned by Nazmul Haque, brother of former state minister for power Enamul Haque.

Both companies got the contract jointly by placing a rate of Tk 12.35 billion for distributing communication systems and meters.

There are allegations that the two companies took Tk 6.17 billion more than the competitive price. Relevant traders said meter distribution under this project has not yet started. So the government still has the option to cancel it.

Speaking to the traders who have been exploited for the last 15 years, it has been learnt that the price of meters have been estimated at Tk 6,220 when the actual price is Tk 4,500. The price of NIC card has been shown Tk 5,295 which should not be more than Tk 2,000. It takes around Tk 100,000 to install a data concentrator unit (DCU). However, the REB paid Tk 313,000 for each DCU. Some 1,600 DCU have been installed so far.

SQ Group deputy managing director Nafiza Islam told Prothom Alo, “Abu Zafar Mohammad Shafiuddin has businesses with his brothers. Besides, each of them has separate businesses.  But they got the contract through a proper and competitive tender.”

Two new government companies were founded at the behest of Nasrul Hamid to supply meters without any tender. The Bangladesh Smart Electrical Company (BSECo) is one of these two companies. The company got registered as a joint venture of the West Zone Power Distribution Company (OZPDC) and Hexing Electrical Company Limited in December 2018.

Former REHAB president and a friend of former state minister Nasrul Hamid Alamgir Shamsul Alamin is the local representative of Hexing. They both had businesses in the real estate sector once.

Another company named Bangladesh Power Equipment Manufacturing Company (BPEMC) was formed to manufacture smart prepaid meters. It was registered as a joint venture of the Rural Power Company Limited (51 per cent share) and China company Shenzhen Star (49 per cent) share.

The local representative of the Shenzhen Star is Mahbub Rahman alias Tarun, a relative of Nasrul Hamid.

Relevant sources say instead of manufacturing, the two companies only distributed meters. The two companies laundered money showing an import price higher than the market price. They were allowed to distribute meters without calling any tender.

The WZPDCL audited the meter distribution of the BSECo and found the two companies were mainly distributing meters instead of manufacturing it. The BSECo laundered Tk 360 million in the name of importing products showing higher prices.

Following that, the then WZPDCL executive director (finance) Ratan Kumar Debnath wrote to the Financial Intelligence Unit of the Bangladesh Bank to take necessary actions against the company.

At the same time, another case was filed with the Chief Metropolitan Magistrate (CMM) Court in Dhaka against Hexing. Later in September that year the WZPDCL board directed the concerned authorities to withdraw the case and the complaint was submitted to the Bangladesh Bank. The case was discarded in November following an appeal in October. The president of the board was the then additional secretary of the power division Nurul Alam. He became the secretary of the Energy Division later. There are allegations that he got promoted as a reward for stopping the trial for laundering money. However, the interim government has already made him an official on special duty (OSD).

Speaking to Prothom Alo on 29 October, Nurul Alam said the allegations of exerting influence against him were not true. The board took the decision to keep the meter manufacturing company running.

There are two meter distributing companies in Dhaka – Dhaka Electric Supply Company (DESCO) and Dhaka Power Distribution Company (DPDC). Prothom Alo collected information regarding the meter distribution of the DESCO. According to that information, the DESCO purchased some 400,000 meters from 2015 to 2019. Lastly, the government agency purchased phase meters at a rate of Tk 5,050 per piece. Later, some 200,000 meters were purchased from Chinese company Hexing at a rate of Tk 2,380 apiece. The price was Tk 3,120 less than the price taken by the TSS.

In 2022, a total of 75,000 meters were purchased from the BPEMC, TSS and SECo at a rate of Tk 5,200 per piece. The same meters were purchased at a rate of Tk 6,300 per piece from the same three companies. The DESCO has issued a work order to purchase some 80,000 meters from the same companies in 2024.

The REB is spending more than Tk 12,000 for each meter. However, it costs Tk 4,000-5,000 at most to supply and install meters, veteran businesspersons in the sector says.

The power division has a total of 47.2 million customers across the country as of 25 September. Of them, some 7.1 million customers have been supplied prepaid meters. The previous government had a target to provide prepaid meters to 100 per cent customers by 2025. However, the customers have several complaints regarding the prepaid meters.

Many have complained of charging extra through the prepaid meters. There are also allegations of abnormal bills.

Relevant officials of the sector said former power secretary, agencies and chairmen and MDs of different companies and project directors were involved in the meter business. Some of them did it for money while some did it for promotions.

Speaking to Prothom Alo, M Shamsul Alam of the Consumers Association of Bangladesh (CAB) said, “The REB has amassed billions of taka by supplying low quality products. Legal actions must be taken against all who were involved in the meter business, including the secretaries and influential business persons to ensure compensations for the victims.

* This report appeared on the print and online versions of Prothom Alo and has been rewritten in English by Shameem Reza and Ashish Basu