ICC-B meet focuses on joint PPP bid to fight power crisis
Courtesy: The Financial Express

14.04.2010 

In an effort to cement ties between the public and private sectors, businessmen urged the government to devise a fast-track approach to facilitate their way to participate along with the authorities in the fight against the nagging power crisis.

Investment in power generation and hydrocarbon exploration should be taken on a war footing and the private sector should be encouraged to take part in the process in a realistic manner, the entrepreneurs said at a conference on energy for growth Tuesday.

The conference was organised by International Chamber of Commerce-Bangladesh at a city hotel. Over 550 participants from different countries attended the programme.

Finance minister Abul Maal Abdul Muhith said the government will formulate public-private partnership (PPP) guidelines by this year to pave the way for undertaking energy and other infrastructure projects under PPP.

He said people should be patient as the power crisis cannot be resolved overnight.

In the last one year, the government approved $1 billion projects in power sector but it takes time to materialise the projects, he said.

The problems are complex and comprehensive as there are problems with power generation, pricing, exploration and transmission, he added. “We have primary resources but the problem is extraction and exploration.”

If gas production increases on any given day, power generation would increase by 500 megawatts, he added.

“We have to use coal, explore gas, broaden transmission lines and import electricity through regional trade to ease the power crisis,” he said.

ICC-B president Mahbubur Rahman said the prime minister unveiled an ambitious plan for power generation of 9,276mw by 2015, of which 4,526mw would come from private sector plants.

He said the public and private sectors should work together to achieve the power target.

“For the private sector, it will be a stupendous challenge to fulfil the target set for it,” he said.

The business leader said the government should simplify the power purchase agreement to encourage the private sector to invest in the sector.

“The government has to make the whole process hassle-free so that more private companies become interested in going for power projects.”

“The private sector is with the government, but it is the government which has to deliver the results,” he said adding, “The government should say that it will buy power at certain price whoever will produce it.”

He said the government should offer the right price for power generation, otherwise private players would not be interested.

The country has several primary energy resources and coal is the most important one, he added.

“The estimated coal reserves are close to 3,300 million tonnes, while the proven reserve is about 884 million tonnes, but there is little effort to extract the natural resources,” Mr Mahbub said.

He suggested diversification of sources of power as fuel oil can help in the short run, while imported coal, LNG, and nuclear power plant can be options for the longer term.

The government has organised several roadshows to attract foreign investment in the sector and it should continue its effort to woo the foreign investors to easing the power crisis, he said.

Adviser to the prime minister Tawfiq-e-Elahi Chowdhury said the private sector came forward in helping the country overcome power crisis in the past.

“The government is convinced that they will do the same.”

The adviser said the government is going to develop an ‘energy fund’ where PPP projects can be financed.

“The government will provide the initial funds to the private entrepreneurs for energy projects, and they can raise the rest of the funds from the non-resident Bangladeshis,” he said.

The adviser said formulation of coal policy and extraction of the natural resources are major challenge for the government and it is working in this regard.

He advised that the private sector needs to use power efficiently to reduce the burden on the national grid.

ICC Global Chairman Victor K Fung said there are always two sides of any crisis – threat and opportunity.

“Whenever any crisis surfaces, it comes with threats as well as huge opportunities,” said the Hong Kong-based businessman.

“Any crisis can help establish a number of initiatives and the current crisis Bangladesh is facing has opened the whole regime for public private partnership.”

“This crisis is an important juncture for Bangladesh. Bangladesh has to utilise it as it will help the country to propel the next level of economic development.”

The public and private sectors can explore the necessary fund in Hong Kong, a major hub for financing big projects, and he would provide help in this regard.

He said Bangladesh has to have proper power supply to maintain its economic growth. “Power crisis should not interrupt this growth.”

Soren Pind, Danish Minister for Development Cooperation, said well functioning energy, infrastructure and communication sectors are required for ensuring continued growth, employment and development.