Balance Sheet Of Successive Government In Energy & Power Sector

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Published on December 23, 2018
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Khondkar Saleque Sufi

Bangladesh is set for 11th General Election on December 2018. The incumbent government among others will have major works in keeping major development activities of energy and power sectors towards achieving sustainable energy securityBangladesh economy achieved impressive GDP growth of about 7% consistently over the last decade. Experts believe that sustainable energy security would lead to Bangladesh achieving double-digit growth. The ensuing general election is expected to be participatory with all parties registered with Election Commission participating. The major contest would be between Bangladesh Awami League led Mahajote and BNP led Jukhto front. Parties and fronts have announced election pledges. We believe energy & power is a strategic area where there must be a meeting of minds among all stakeholders. On the eve of the election, it won't be out of place looking back in retrospect the performance of major political parties since 1990. Authentic information may assist voters in making the right decision even from relative analysis of performance between two major fronts.

BNP and the front it leads ruled Bangladesh on two terms and a bit in 1991-1996 and 2001-2006. Awami League and its front were in state power in 1996- 2001, 2008 -2013 and 2014 - 2018. Energy and power sector witnessed paradigm shift from 1990 t0 2018. We may try to objectively assess the performance of the two fronts during their tenure.

BNP Government Performance During 1991-1996  

BNP formed the government in 1991 winning the general election after the fall of autocratic military ruler General Ershad. Own natural gas was at that time almost exclusively accounting for energy and power generation. BNP government created SAIPEM Scandal. The Italian Contractor got away with a major win in Arbitration despite its failure in completing contractual responsibilities. There surfaced major allegation of corruption against ministers and government officials. For politicization and poor governance, Petrobangla caused major depletion of gas reserve of Bakhrabad and Feni gas fields creating gas draught in Chittagong region. There created major power load shedding. CUFL and KAFCO required shutting down. The government could terminate the contract with Scimitar engaged during Ershad Regime in Surma Basin for Oil exploration but they were replaced by another marginal company Occidental in a nontransparent manner in Blocks 12, 13 and 14 under lopsided PSC. Government also engaged Chinese Company under suppliers credit for inappropriate underground mining at Barapukuria Coal mine. The government also signed the Exploration Lease and Mining Contract with BHP Mineral Resources for Phulbari. Minimum works in the power sector and major depletion of gas resource created a diabolic situation in power and energy sector. The total generation capacity at the end of their tenure was 1800 MW against a demand of 3500 MW. Gas production was 800 MMCFD against a demand of 1200 MMCFD. The government took almost three years for concluding award of contract to an Australian company for construction of  58 KM long 30 inches Outer diameter Ashuganj Bakhrabad Gas transmission pipeline for completing national gas grid facilitating stranded gas in Sylhet region to the entire gas franchise. The BNP government left behind a chaotic energy & power sector when they were forced to step down and let neutral caretaker government conducting the election in 1996.

Awami League Led Government Performance from 1996-2001

Starting from chronic crisis Awami League government made major turning around through successfully accomplishing several mega power and energy infrastructure development projects.The major achievements were

  • Expediting Construction of Ashuganj Bakhrabad Gas Pipeline and commissioning it within 9 months in the office. Power generation from plants in Chittagong and production from CUFL and KAFCO were restored
  • Beanibazar, Salda and Meghna Gas fields were connected with National Gas Grid
  • Gas System was extended to Western Region of Bangladesh along Bangabandhu Jamuna  Multi-Purpose Bridge
  • Shangu Offshore Gas Field and Jalalabad  Gas field were developed and connected with the gas grid
  • A PSC Bidding Round was successfully conducted and some IOCs were duly engaged under PSC for onshore oil and gas exploration
  • A very large Bibiyana Gas Field was discovered
  • The blow out of Magurchara Gas Field was successfully brought under control and Maulavibazar Gas Field was discovered.
  • Gas Production increased from 800 MMCFD to 1400 MMCFD
  • The government did not agree with UNOCAL Proposal for Export of Gas From Bibiyana Gas Field to India
  • The government did not yield to the pressure of letting NIKO redeveloping Feni and Chattak Gas Fields
  • The government enacted IPP, SPP Private Sector Power Generation Policy
  • 350 MW Gas based Power Plant at Haripoor was commissioned and works of 450 MW power plant at Meghnagaht was significantly completed.
  • Three barges-mounted power plants were set up in Khulna, Siddhirganj, and Bagahabari
  • Three SIPP were set up at Savar, Narshingdi, and Kutumbapur
  • ‘Power generation capacity increased from 1800 MW to 4200 MW when Awami Government left office in 2001. There was no crisis in gas supply or fuel supply
  • At 20 medium to large projects for power generation was in the pipeline

Awami League government left a very vibrant Energy & Power Sector

BNP Jamat Alliance Government Performance From 2002-2006

This period must be considered as the darkest period for energy & power sector as the generation capacity instead of increasing from 4200 MW depleted to 3200 -3500 MW. No new large power plants were developed. Only the remaining works of 450 MW Meghanghat Power plant was completed. A scandalous Tongi Power plant was the lone addition. But many old plants were retired. The government scrapped all under negotiation contracts for new plants. Major among those was a large gas-based power plant of Summit BPDB JV at Sirajganj.

The government came to power with a commitment for gas export to India from Bibiyana. But under peoples pressure failed to do that. They let UNOCAL Developing Bibyana and Maulvibazar Gas Fields. The lone new discovery was at Bhangura. The gas structure of Shangu offshore field was destroyed for continued overproduction. The government could complete Ashuganj Rashidpur Gas transmission loop line construction and extension of the gas system to Bogura.

Few major corruptions were made. NIKO Resources a company that failed to qualify in PSC bidding round was awarded a contract for redeveloping Petrobangla Owned Feni and Chattak Gas Fields and a virgin Tengratilla structure. The novice company created two major blowouts at Tengratilla while exploring for gas. Bangladesh is deprived of gas supply from these resources for consequential arbitration.

The eventual power crisis led to peoples agitation at Kansat on the street . People were killed when police opened fire on them. People were also killed at Phulbari when people agitated against open pit Mining Initiative   of a foreign company .

Choric power supply crisis led to 8-10 hours load shedding in 2006 . Government failed to initiate any new power generation project but power and gas demand expanded exponentially . Government let vested quarter procuring Electoric poles at a much higher cost but could not supply power.  Deletion of Shangu gas field created gas supply crisis .

Government failed to proceed with a matured tri nation gas transmission pipeline from Myanmar to India across Bangladesh . This pipeline could supply upto 500 MMCFD gas to Bangladesh from 2008 at a nominal cost of US$ 3.00 .

Awami League Led Alliance Government From 2009 -2018

When Awami League Government took office in 2009 there existed 10-12 hours chronic power load shedding and huge gas deficit . The power generation reduced to 3200 MW against a demand of 6000MW . Gas supply was 1700 MMCFD against a demand of 2300 MMCFD .  Government had to make short , medium and long term power generation plan . Government had to diversify fuel mix introducing liquid fuel , imported power and LNG in the fuel mix . In 10 years power generation capacity increased to over 20,000 MW including 2800 MW off grid capative power and 1160 MW import from India . The access to power increased from a mere 42% to 92% . Nation is well on course for achieving 24,000 MW generation capacity and power supply to all by 2021 , 40,000 MW by 2030 and 60,000 MW by 2041 .

Several imported coal based power based power plants are at different stages of implementation at Matarbari , Maheshkhali , Payera , Rampal , Bashkhali , LNG terminals FSRU and Land based are being developed at Maheshkhali , Matarbari , Kutubdia and Payera . Coal port and Coal Transfer terminals are being developed at Matarbari and Payera. A 2X1200 MW Nuclear power Plant is being developed at Rooppur .

Government has already started importing 1160 MW power from India . The import may increase to 3000 MW by 2020 . Talks are maturing for JV development of hydro power project under BBIN initiative in Bhutan and Nepal and sharing in the regional power grid .

BAPEX is implementing a 108 wells including 53 exploration welss drilling program. Petrobangla has finalized Model PSC 2018 for a fresh PSC bidding round in deep offshore .

Observers suggest that incumbent government must keep the momentum going in the power and energy sector to facilitate the seamless development of all power and energy sector mega projects. Sustainable supply of power and energy is a must for achieving the national vision of mid income country by 2021 and a developed country by 2041. The matters  of concern are affordable fuel mix and extensive capacity development required for operation and maintenance of the mega projects . Energy & Power sectors must be kept out of politics.