Four problematic rental plants may get extension | 2017-04-11 |

Four problematic rental plants may get extension

Tk 671cr from the plants stuck in legal dispute

Shamim Jahangir     11th April, 2017 12:01:57 printer

Four problematic rental plants may get extension

The government is likely to renew its contracts with four problematic rental power plants for another five years though the private plants still owe the authorities Tk 671 crore in demurrage fees.


The rental plants are reluctant to clear the arrears and lodged cases against the liquidated demurrage (LD) claims made by the Power Development Board (BPDB) for excessive fuel use and delay in commissioning.


“We are hopeful of settling the dispute with the rental plants soon as the courts have shifted the cases to the tribunal of Bangladesh Energy Regulatory Commission (BERC),” an official said.  


A high-powered committee will sit with six private power plants, including the problematic ones on Thursday (April 13) to negotiate the tariffs for extension of deals and allowing two new plants under the Speedy Supply of Power and Energy Act, the official confirmed. 


The prime minister’s office (PMO) has already approved a summary proposal for extension of these power projects on February 22.


The six power projects, having a combined capacity of 455MW, include the 50MW Anmura, Chapainawabganj Rental Power Plant sponsored by M/S Sinha Power Generation Company Limited; the 105MW Noapara Rental Plant in Jessore by Quantam Power System Ltd; the 50MW Katakhali Rental Power of M/S Northern Power Solution Ltd; a 100MW plant owmed by M/s Powerpac Mutiara Keraniganj power plant Ltd; the 100MW Karnaphuli Power Ltd and another 50MW plant in Panchagar.


The government also have a plan to set up a 100MW power plant in Chittagong to overcome regional power generation crisis there to some extend.


The tenure of the 105MW Noapara plant has already expired on August 25 last year. The plant has requested the government to extend its tenure for another 10 years. It has a dispute with PDB over the payment of $38.16 million since 2013. Owned by furniture maker Otobi, the private plant has been facing issues since long.


Besides, the Anmura Rental Power Plant, which expired on January 1 this year, has applied for a five years’ extension. PDB earlier claimed over $3.42 million from the plant for delays in commissioning and another $8.04 million for excessive fuel use. 


The Keraniganj plant and the Northern plant were scheduled to expire in March and May this year respectively.


The Keraniganj plant sought an extension for 10 years while the Northern Power plant has sought another five-year contract. PDB claimed over $21 million from Powerpac Mutiara Keraniganj power plant Ltd in liquidated demurrage.  The state-run PDB claimed over $8.92 from Northern Power plant for delays in commissioning and another over $3.6 million for excessive fuel use.              


PDB has already agreed to extend the tenure of the plants for another five years as they have agreed to settle their dispute with PDB, a PDB official said.


According to the estimation of power division, the country’s electricity demand shoots up by 10-12 percent a year. The government has already allowed 29 rental and quick rental power projects since 2009 to meet short-term electricity demand. The 29 power plants have a combined capacity to generate 1955MW of electricity.


The Power Division has recently extended the tenure of six rental power projects owned by local Summit Group, Orion Group and UK-based Aggreko International Projects Ltd.


The government now gets 3460MW of electricity from the liquid fuel-fired plants that were taken for crisis management due to delay in the implementation of load based power projects.