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PDB in total disarray

Struggles to coordinate between about a dozen organs formed under donors' prescription; management cost shoots up

sharier Khan
Following a donor-driven policy, the government continues to slice different organs off the Power Development Board (PDB) to create new ones causing lack of coordination, imposing excessive management cost and pushing the sector into a deeper financial mess, officials say.
Excluding the creation of Rural Electrification Board (REB) in the 70's, the government created eight different bodies out of the PDB since the 90 s and currently forming two more companies for power distribution
In addition, the Power Cell--a wing of the power ministry created in the mid 90's for a year to deal with policy issues--handle some power tenders that used to be handled by the PDB.
The role of PDB is increasingly becoming that of a coordinator. But coordination has become very difficult due to problems with technical and financial
resource sharing in the present context of persistent power crisis.
’For an example, some companies do not have technicians or equipment to deal with a certain problem. They would call up the PDB for help. This causes delay in solving a problem. If everything was under
the PDB, such problems could be solved in one go," explained a high official.
There are three state-owned power generation companies now--Ashuganj Power Station Company Ltd, Electricity Generation Company of Bangladesh and Northwest Zone Power Generation
Company. All of these companies were formed after June, 2000.
In addition there are four power distribution companies and two more are in the pipeline. The existing distribution companies are Dhaka Power Distribution Company (DPDC), formerly Desa, Dhaka Electric Supply Company (Desco), West Zone Power Distribution Company (WZPDC) and North West Zone Power Distribution Company.
The two upcoming distribution companies are South Zone Power Distribution Company and North East Power Distribution Company.
Besides, the REB deals with rural power and Power Grid Company of Bangladesh (PGCB) looks after power transmission. Again, the REB owns another power company Rural Power Company Ltd (RPCL).
All of these were created with the goal of improving efficiency in the power sector. But that goal remains a far cry as the state-run sector is miserably failing to address the country's power needs due to lack of coordination, efficiency and transparency, observed senior officials of the PDB and the Power Cell.
They said retired or serving bureaucrats, who do not command records of efficient performance or professionalism, now run the managements of these new organisations. But one of the objectives of having these bodies was to put some professional managers in charge of them.
"We have seen that over the years, the recruitments of the managers are not done fairly. Competent candidates are not hired and those who lobby hard behind the scenes bag the top posts," said a source.
"Too many cooks are spoiling the broth in the power sector," said a top PDB official, "So many organisations are dealing with only 4,000 megawatts [MW] of power generation with 6.000MW installed capacity."
In contrast, the National Thermal Power Company (NTPC) oflndia is dealing with 30.000MW of power and ranked as 317th largest companies in the world by Forbes.
"Another objective for creating so many organs was a vision that the PDB will function like the Petrobangla that has 11 different subsidiaries. But it did not happen because the business transactions of the two entities are different in nature. Plus most of the power bodies are not being run as good as the organs dealing with gas transmission and distribution," another official said. He noted that the PDB is a major buyer of Petrobangla's gas, while Petrobangla is not a big customer of the PDB.
As each of these companies under the PDB has separate sets of management team, this has increased the overall management cost. These management personnel draw high salaries and get other benefits including cars and
houses.
"Previously the power board would have done the same job now taken over by seven-eight management teams," quipped a top PDB official.
On the other hand, all of these companies and the PDB are severely lacking technical manpower--mainly because the PDB had hardly recruited technical hands after 2000.
Sources said the PDB alone has 7,000 vacant posts.
Another problem for these companies is getting adequate financial returns to ensure their growth. A distribution company like the Desco has been making huge profit as it is dealing with a good customer base. But another company like WZPDC is incurring loss because of its poor customer base. But whether it incurs loss or makes profit, the company must continue to expand and provide power to people. So far no mechanism has been set to address such an issue.
The PDB also remains the single buyer of the bulk power produced by 19 independent power projects (IPP) and 19 state-owned power generation points. The REB, however, directly buys a small portion of power from nine small units across the country.
The power purchase rates are variable as these are determined by contracts and the PDB purchases a good part of this power at a cost higher than its government-determined selling price to the four distributors. As a result, the PDB bears the loss, which the distributors do not.
"As too many companies have been made from the PDB, the scale of economy for these companies has become smaller. Their operation cost is now comparatively higher than what it used to be," a top PDB official noted.
The PDB has been incurring about Tk 400 crore loss a year from the late nineties to 2002-03. This level of annual loss hovered around Tk 800 900 crore since 2005-06.