Stop wastage and corruption in power sector

The Bangladesh Energy Regulatory Commission (BERC) has finished the four-day hearing proposal on power tariff hike in bulk and retail level. As per BERC policy, any distribution company cannot propose to raise price if it is profitable.

There are six distribution companies at a consumer level in the country the Power Development Board (PDB), Bangladesh Rural Electrification Board (REB), Dhaka Electric Supply Company Limited (Desco), Dhaka Power Distribution Company Limited (DPDC), Northern Electricity Supply Company Limited (Nesco) and West Zone Power Distribution Company Limited (WZPDCL).

Among those, PDB distributes electricity to both individual and bulk consumers in the country.

Incidentally, Desco, among other companies, is the only registered company in the stock market. It received 10 per cent incentive against each share in past four years consecutively. The other 5 companies are also in profit.

Under the circumstances, the proposal to raise the price of electricity is unreasonable and illegal. The distribution companies have to prove they are in loss to do so. The public hearing can only be held after that. The proposal to raise prices at bulk and retail level cannot be discussed before that.

PDB has proposed to increase the price of bulk electricity by 1.11 taka per unit. The company claims that if the price does not rise, subsidy of more than 86 billion taka has to be paid. But energy experts believe the energy deficit can be recovered by reducing inefficiency, waste and corruption in this sector, rather than raising electricity prices. The government should focus on consumers rather than increasing pressure on them. Incidentally, the government has increased electricity prices at retail or consumer level six times and four times at bulk level in the past 10 years. There has been public concern over the process of raising electricity prices this time.

PDB, however, justified the price hike proposal by blaming the devaluation of BDT in the international market, the increase of gas prices by 41 per cent, the imposition of a 5 per cent VAT on coal, and the increase in the cost of electricity generation. Their argument may not be invalid. But the government must also consider whether there is an alternative way to recover the deficit. The PDB consumers shall not bear the burden of price surge because of the distribution companies’ failure to pay their dues. If a distribution company does not pay the current price of electricity, what made PDB believe those companies would pay the increased price?

The need of sustaining Quick Rental power plants are being questioned, too. The government had opened quick rental plants to increase power generation in 2009-10 to fight the shortage at the time. The government has bought electricity from them at a price higher than the cost of production. Quick rental was needed at the time to save the industry and bring relief to public life.

But according to the government statement, where the power plants are capable of producing more electricity than the actual demand, there is no need for quick rental centres.

On the other hand, among the 80 billion subsidies as per the government statement, 40 billion is spent to provide electricity to the poor at lower cost. It is part of the government's social security programme. Showing this subsidy in the PDB's loss accounts is nothing but fooling the people. The government should stop wastage and corruption in this sector rather than raising electricity prices. It should bring back transparency and accountability to the sector, too.