POWER PURCHASE FROM INDIA
Govt turns down Adani conditions
SHAHED SIDDIQUE and FAISAL MAHMUD
The government has turned down a set of conditions imposed by Indian power giant Adani Power Limited (APL) regarding power purchase from the proposed 1600-megawatt coal-based plant in Jharkhand, India, sources in the ministry said. The Power Division declined to accept the APL conditions as it appears to be unfavourable and non-compliant with the initial power purchase agreements (PPA), the sources said. APL wants to sell electricity to Bangladesh Power Development Board (PDB) on terms favourable to it by changing some of the clauses of the PPA with PDB. Its unethical and will ultimately go against the interest of Bangladesh, a senior official of the ministry told The Independent.
He said the APL placed its offers during a meeting with senior officials of the power, energy and mineral resources ministry in Dhaka on Monday. Experts said that if Bangladesh bought electricity by complying with the terms imposed by the APL, it would suffer long-term monetary losses.
The APL is going to construct a 1,600 MW coal-based power plant in Jharkhand, India. Bangladesh plans to import electricity from this plant for a period of 20 years. PDB sources said the APL imposed some conditions on this power import. Among them, one is that PDB has to bear part of the taxes and other duties which the Indian authorities are going to impose in future during the implementation stage of the plant.
Besides, Bangladesh has to pay the transmission charge to Indias state-owned NTPC for bringing electricity from Jharkhand. The APL also wants to give operation security deposit (OSD), equivalent to one month of operational capacity payment, to the BPDB. It wants the provision to draw the OSD money within the five years of operation. Local Bangladeshi independent power producers (IPP) usually provide equivalent of two months of operational capacity payment as OSD and cannot draw that money unless the end of the PPA period with the BPDB. The APL also wants to impose 2 per cent extra charges on coal import. It means if Bangladesh wants to import electricity similar to 100 tonnes of coal, it has to pay prices for electricity amounting to 102 tonnes of coal. Earlier, the APL had agreed to sell per unit electricity at Tk 6.85, but if BPDB now abides by these new conditions of APL, the per unit electricity price will be more than Tk. 8.50. Bangladesh now imports electricity from India at an average price of Tk. 4.91.
Hence, if Bangladesh chooses to import electricity at such high prices, it would cost the country several thousand crores extra amount at the end of the year.
The APL also demands money for lower outages at its power plant. An outage for a power plant is the allowed time in a year during which the plant can remain closed for maintenance. A 1,600 MW power plant gets an outage of 1,440 hours, which is equivalent to 60 days. According to the PPA with the BPDB, if an IPP uses more outage than its designated amount, it has to pay a fine. However, if it uses less outage than the designated amount, then the rest of the outage amount is carried over to the next year. The APL demanded cash incentive for less outages, even though the BPDB has no such provision in its PPA with the Indian company.
The government had earlier signed a memorandum of understanding (MoU) on August 11, 2015, with the Indian firm to import electricity over a 25-year period. The Adani Group has so far developed and operated 16 power projects in India, with the electricity generation capacity of 9,240 MW.
Talking with The Independent yesterday, Nasrul Hamid, State Minister for Power, Energy and Mineral Resources, said that the tariff for per unit electricity price from APL hasnt been fixed yet. We are still negotiating with the Indian parties. We hope to buy the electricity in our favorable terms, he said.
