PM’s energy advisor wrongly blames critics

Energy Bangla, June 6, 2012

Engr. Khondkar Abdus Saleque
Dr Tawfique-E-Elahi Chowdhury, BB in a recent press meet has termed his critics as Intellectual dishonest and anti state persons.

He is Energy Advisor to Prime Minister of Bangladesh. The PM is also in charge of Power, Energy & Mineral Resources.

Bangladesh and the rest of the world knows that the country is now  passing through the worst ever power and energy crisis. Major cities of the country are suffering from 8-10 hours load shedding on the average. The gas and power crisis has stalled growth of industries, and has stagnated economic development.

Many apprehend that at least 1% GDP growth has been impacted for lack of power and energy supply. Needless to mention that these have happened for failure of power and energy sector policy makers and management to make visible and credible improvement  of diabolic situation the present government inherited from failed previous government.

Energy Advisor is not elected representative of the people.PM preferred him to other elected MPs and senior leaders possibly considering his previous dynamic track records,  from his  strong links with US Companies active in Bangladesh and his  contribution to liberation war of Bangladesh.

He was Secretary of MOEMR in earlier term of Bangladesh Awami League Government. Much of the credit of expeditious improvement of similar crisis situation of power and energy in 1996-2001 can be attributed to his dynamic leadership. But compared to that 1996- 2001 period performance of Energy Advisor this time  is well below per.There can be several reasons .May be there is no such young accomplished sector professionals , may be the depth and diversity of the problems are much greater. But there cannot be any denial that energy and power sector management has miserably failed to confront the crisis.
The major controversy is about success and failure of Quick Rental imported fuel based power plants considered under short term contingency actions in confronting power crisis. No person would have raised any questions if all the power plants claimed to have created 3300 MW new plant could be up and running steadily now. If the contingency action dues to flawed planning did not create bleeding of economy created from huge subsidy over burden.  The controversy has arisen due to failure of quick rental option to bring sustained relief. Many of the contracts of this expensive option could come to an end if some major base load power plants could be commissioned in three and a half year.
Why Quick Rental plants failed to achieve expected results?

  1. The responsibilities for arranging fuel from volatile world liquid fuel market was wrongly vested on state owned BPC.
  1. BPC was made to import diesel and liquid fuel at high price and supply at much lower price to power plant developers. These created serious liquidity crisis of the SOE .Significant subsidy given to it as loan could not compensate the losses.
  1. Instead of qualifying developers through competitive bidding novice developers – mostly first timers were allowed to try their luck. Many of them failed to set up plants within time or even within several extended period.
  1. Most of the developers brought fuel inefficient second hand plants which failed to generate even 50% of the rated capacity .
  1. Increase of fuel price created huge financial strain on BPC. Even Government budget was stressed to provide subsidy.
  1. Developers were allowed to get phenomenal power tariff much higher than other base load or peaking plants. This caused PDB loose heavily.
  1. Although on paper 3300MW new power was generated. But actual increase of was 5200-3500= 1700MW.
  1. PDB always hides actual power demand and real % of system loss. Accordingly real power deficit was always masked. According to many power deficit now is not less than 3000MW.

The quick rental power initiative was adopted without required feasibility study and financial analysis. We agree that there were little other options to improve the situation within the shortest period. But the process in which the Pandora box was opened for all, it benefitted ruling party blessed energy mafia syndicate only. Government was forced to take unpopular and unpleasant decisions of increasing power tariff on some occasions despite of diabolic power supply situation. Energy Advisor cannot deny blame for this as he is also a PHD in Development Economics from Harvard University. He should have done required financial analysis of the options considering its sustained impacts on national exchequer.

Power sector management failed to advance traditional fuel based base load power plants in three and a half years. Local Summit Group and GE JV were disqualified in bidding for Bibiyana and other major power plants during Caretaker Government. But the same JV almost won all major contracts for gas and dual fuel based plants now. Till writing this report only the 450MW dual fuel based plant at Meghna Ghat has an outside chance to start generation within December 2013. Summit has failed to have financial closure of any of its large Bibiyana plants till now. Summit Group is the major power plant developer and operator in Bangladesh .But it definitely does not have financial, technical and managerial capacity to implement construction of several large power plants simultaneously. Failure of implementing any major gas based power plant in three and half years has failed to cause major improvement in power supply situation.
Energy Advisor could not steer PDB making appropriate planning for rehabilitating and replacing many old outdated fuel inefficient power plants with fuel efficient new plants. Consequently power generation from all gas based power plants have been drastically reduced .Power generation suffers from frequent outages of these plants. Petrobangla supplies about 850 MMCFD Gas to PDB. Using this volume of gas modern combined cycle power can easily generate at least 6000MW power. But unfortunately for lack of action from PDB in replacing old plants situation has now become serious.

Moreover, due to failure of Petrobangla is planning and implementing various gas exploration- exploitation projects on time, gas system is also suffering from serious deficit.

Energy Advisor wrongly advised PM for imported coal based power plants and for importing LNG. For technical constraints, infrastructures constraints these initiatives are not feasible over mid terms.

Energy Advisor failed to convince PM about the realistic strategy of mining own coal and setting up of mine mouth coal plants. If started by the middle of 2009 at least 2000MW own coal based power plants installations could be at advanced stage now. Unfortunately coal mining still is at stalemate situation. Energy Advisor is possibly in the grip of Coal Mafia syndicate. All are worried about aquifer above and below the coal reserve of Bangladesh. It must not be a cause of concern. Modern mining technology has appropriate water management. Mine water after treatment can serve the purpose of sweet water supply in mine areas , can be used for irrigation round the year and part of it can also be pumped back to replenish aquifer . Other environmental and social impacts can also be effectively managed and mitigated.

The only under operation Barapukuria Coal Mine using underground long wall method has suffered from all impacts – water flooding , gas formation and inevitable mine subsidence .Barapukuria according to experienced miners is the most ideal mine for surface mining . But for inappropriate and illogical mining method nation will be deprived off most of the coal as some seams of the blocks from where mining has been done are already crashed into powder. Mine subsidence has already been initiated making the entire area vulnerable. There is no credible technical reason why surface mining cannot be done at Barapukuria and Phulabri. Using own coal for power generation is the only credible option for creating midterm energy security of Bangladesh.

Energy Advisor also miserably failed to make Petrobangla drive its fast track gas field development to success. PM herself had to take initiative of bringing Russian Energy Giant GAZPROM to Bangladesh. Many say Energy Advisor tried to create some barricade to PM’s initiative as well. If GAZPROM could be mobilized by early January 2012 there were opportunities to get about 200MMCFD new gas in national grid by End June 2012. Delay in concluding agreements, ensuing monsoon and growing political uncertainty may impact upon this initiative adversely. For lack of appropriate actions Titas Gas field is leaking dangerously for several years.

We constantly advised through our column to carry out on-stream pigging of major gas transmission pipelines to restore maximum capacity. Only this operation can allow transmission of about 200MMCFD addional gas from stranded production facilities to downstream demand centers. Pigging can also significantly improve low gas pressure situation.

This author wrote mails to Energy Advisor and even met him in person. But he has so far failed to take positive actions.
The present crisis situation has triggered from failure of exploring and exploiting own resources – Coal and Gas. While BAPEX made some contribution IOCs other than Santos could do very little. Why Bangladesh could not go for fresh bidding round at onshore frontiers? At this stage of crisis there could have been a dozen rigs hunting for petroleum. But this did not happen due to lack of required leadership of PM’s Advisor. The mining efforts of own coal suffers from evil acts of coal mafia syndicate which is managed to persuade policy makers in opting for impossible to implement within short term the imported coal option .Again there is no financial modeling and credible feasibility study.

The PM’s advisor must not have blamed his critics as anti state elements. Patriotism is not his sole property. All his critics are not anti state elements. He must say sorry and withdraw his statement. Many of us are aware of his controversial role in some matters. On his insistence Petrobangla was compelled to let Chevron, an upstream operator construct a Gas Pipeline Compressor Station at Muchai .It could be built at a much lower cost by GTCL selected contractor .For his insistence an unnecessary pipeline is being constructed from Bibiyana – Dhanua through very aggressive ROW .For his wrong strategy People of Rajshahi is deprived of pipeline gas supply though gas in the line pack can very well meet the requirement.

We still have respect for his dynamic leadership. We also know that it is only he who can provide leadership to tide over the present crisis. The author did several milestone projects under his dynamic leadership. We are among the major critics of his present policies. We are definitely not intellectual dishonest persons or anti -state elements. When it comes to serving national interests we will definitely not leave any of his unwarranted comments go unchallenged.