Quick rental power plants are to be blamed for loss in BPC, PDB

The net losses incurred by state enterprises doubled to Tk 16,880 crore in the current fiscal year compared to the previous year, mainly due to lower selling prices of fuel and electricity than their purchase prices.

Of the 48 state enterprises, 36 made a profit of Tk 8,386 crore, while 12 incurred Tk 25,266 crore losses, according to Bangladesh Economic Review 2012.

Of the loss-making enterprises, Bangladesh Petroleum Corporation and Bangladesh Power Development Board suffered 99 percent of the total amount of losses.

The BPC incurred a loss of Tk 16,082 crore in the current fiscal year, up from Tk 8,840 crore last year. The PDB suffered a loss of Tk 8,431 crore in the current year, up from Tk 4,587 crore a year ago.

A finance ministry official said the major cause of the losses in both the enterprises is fuel-guzzling rental power plants.

He said the BPC had to import more fuel than before to run the power plants. On the other hand, though fuel prices rose on the international market, the prices were not adjusted much domestically.

The finance ministry official said irregularities and wastage were also responsible for the losses suffered by the BPC. A few months ago, a committee was formed to scrutinise the income, expenditure and import of the state enterprise.

The PDB had to purchase electricity at higher prices from the quick rental power plants, but sold electricity at comparatively lower prices.

Even after adjusting the electricity prices several times, now the production cost is Tk 6.80 a unit, while the average sales value is Tk 4.02 per unit, meaning the PDB incurred a loss of Tk 2.78 for a unit of electricity.

Besides, the PDB also incurs “system losses”. A PDB official said, though the system loss came down slightly over the last few years, it is still around 8 percent.

However, the official said the main cause of the losses in the current fiscal year is purchase of electricity at higher prices from the quick rental power plants.

From fiscal 2004 to fiscal 2010, the PDB losses hovered between Tk 121 crore and Tk 993 crore, and the loss started rising sharply from the last fiscal year.

However, a number of improvements were noticed at two enterprises — one reduced losses and the other raised profit — drastically.

Bangladesh Chemical Industries Corporation (BCIC) cut its losses by 63 percent in the current fiscal year compared to the previous year. In the current year, the BCIC incurred a loss of Tk 158 crore against last year’s Tk 434 crore.

Bangladesh Telecommunication Regulatory Commission increased its profit by 93 percent to Tk 5,849 crore in the current fiscal year over the last year.