Electricity deals with Delhi on hold

Friday, April 8th, 2011
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Dhaka and Delhi have ultimately failed to sign the two proposed agreements on power sector cooperation, despite both sides expressed a much hope to do so within the month of March.


Power Division officials said they are yet to get clearance from Finance Ministry on the proposed deals that attribute the delay while PDB blames the delay is result of failure in land acquisition.


The proposed deals are the Power Purchase Agreement (PPA) and the Agreement on formation a joint venture company to set up a 1,320 MW coal-fired power plant in Khulna in Bangladesh.


The PPA is designed for import of 250-MW electricity from India and the joint venture company is planned for setting up of the 1,320 MW power plant and its operation and maintenance.


Targeting to sign the agreement within March this year, Officials from the two neighbouring nations held their last joint meeting in Dhaka on March 7.


During they finalized the terms and conditions of the deals and also discussed the progress in the implementation of different projects undertaken as part of power sector cooperation.


Concluding the meeting, power secretaries of the two countries, who led their respective sides, announced that they would firmly sign the two final deals within March 2011.


But now the Power Division officials said the two proposed deals—the PPA and the Joint Venture Company formation—were not signed as because they could not receive the necessary clearance from Finance Ministry and also from the Central Procurement Technical Unit (CPTU) of the Planning Ministry.


Sources said that following the meeting of March 7, the Power Ministry had sent draft copies of the two proposed agreements to the Law Ministry for necessary vetting. The Law Ministry cleared the matter with condition that those have to be cleared by Finance Ministry, CPTU and Bangladesh Bank.


“Accordingly we have sent draft deals to them. And we have already received clearance from Bangladesh Bank. But now we’re waiting for clearance from the Finance Ministry and the CPTU,” said a senior official at Power Ministry.


He said the Power Division is hopeful of receiving the clearance from Finance Ministry and the CPTU soon. “Afterward we’ll move for signing the two agreements,” he told UNB.


Meanwhile, a top official at Power Development Board (PDB), however, expressed pessimism about signing of the two deals with Iida shortly.


He informed that a total of 1,834 acres of the land will require for setting up the proposed 1,320 MW coal-fired power plant at Mongla in Khulna.


“But, the land is yet to be acquired by the authorities concerned. So, if we had not have the land in our hand, how could we proceed for signing agreement with India for the power plant,” said the PDB official.


Similarly, he said, the implementation of the transmission line project is far behind the target. “That’s why we show a less interest to sign the deal right at this time,” he said on condition of anonymity.


Bangladesh signed a memorandum of understanding (MoU) with India on January 3, 2010 for importing 250 MW electricity and also setting up of a 1320 MW joint-venture coal-fired power in Bangladesh.


But in last 14 months, no progress was visible about the implementation of the projects. The Bangladesh side invited tender for implementing 110 kilometre transmission lines and setting up of substations in two sides.


While signing the MoU, the Ministry had expressed hope that import of electricity from India would start from January 2012. Now, they believe might start in middle of 2013. But many experts believe that the projects will need more time to be implemented.




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