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Indo-Bangla Ties

Power import faces Mamata hurdle

Joint coal-fired plant to take time

Sharier Khan
Import of 250 megawatts of power from India at a competitive price by the middle of next year faces a hitch as the Power Grid Company of India (PGCI) is not getting clearance from the West Bengal state government to buy land for installing a
related switching station.
Alongside this state-to-state import, the Power Development Board (PDB) has floated a tender for purchasing another 250 MW power from the open market of electricity in India. But import of that extra power also depends on the same switching station in
Behrampur near the border in West Bengal.
Importing this power may give Bangladesh an early respite from load shedding as the government's performance so far is poor in implementing large and cheaper long-term power projects, which are unlikely to be completed before the expiry of tenure of the Awami League government.
Explaining the problems of power import, a top PDB official said the PGCI selected private land to install the station. The private owners are asking for land price much higher than the government-fixed land acquisition price.
The PGCI is ready to pay that high price, but the West Bengal Government would not let it pay that price.
The West Bengal government argues with the PGCI that if it allows the purchase at such a high rate, it will have implications over land purchase for other projects.
“We gather that the Indian central government's power secretary and minister are persuading the West Bengal government to resolve the matter at the earliest possible time. We are hopeful it will be resolved soon,” the official said.
Based on the joint declaration of the two countries signed during Prime Minister Sheikh Hasina's January 2010 visit to India, the two nations struck the power deal and started building infrastructure to transmit 500 MWpower.
The power purchase agreement (PPA) between the PDB and the National Vidyut Vikas Nigam was signed on February 28. As per the PPA, Bangladesh will get power from several plants at a discount rate reserved for the Indian central government. In India, power sales rates vary from plant to plant and the rates are higher than that in Bangladesh.
“We will get the power at a rate of Tk 4.25 per kilowatt hour which includes power transmission cost,” a PDB official said.
This rate is higher than that
of power generated by the local gas-based large power plants, but much lower than that by the rental plants.
The PDB aims at bringing the other 250 MW power from the open market at a tariff of Tk 5.5 at the maximum.
“We have floated a tender and we plan to put an advertisement in Indian newspapers. If we can strike a deal and if the switching station issues are resolved soon, we can hope to have 500 MW power from India by July next year,” said the official.
To facilitate the power import, Bangladesh is implementing a $142 million project for setting up the power grid and a power conversion station in Bheramara with funds from the ADB.
Meanwhile, in the light of the joint declaration, the PDB is preparing to give a final touch to its joint venture coal-fired 1,320 MW power deal with the Indian National Thermal Power Company (NTPC).
An NTPC team is due to visit Dhaka on May 6 to discuss power purchase agreement and implementation agreement — two vital jobs before any power project can start.
An official explained, “The company registration of the PDB-NTPC's joint venture company is underway where both of us will have 50-50 equity.”
The coal-based plant to be set up in Khulna close to the Sundarbans will require $1.5 billion investment. Getting such finance may be a challenge and, therefore, the PDB believes this project will take time to complete.
The PDB had earlier targeted completing the project by 2015. But it is now looking beyond2016.