The electricity shortfall is likely to reduce dramatically by August as six rental plants move to operate commercially.
“By August, we expect to achieve a new benchmark of power generation -- 5,000 megawatts,” said a top official.
Presently, the Power Development Board (PDB) is generating around 4,500 MW leaving a shortfall of minimum 1,000 MW.
Of the six rental plants with generation capacity of 371 MW, three will start contributing to the national grid this month. All the rental plants will operate for three to five years.
Rental plants apart, three public sector peaking power projects, with production capacity of 150 MW, will start to deliver within three months. These plants in Daudkandi, Baghabari and Faridpur are expected to run for 15 years.
The load-shedding situation has gone back to a tolerable level this summer due to a relatively cooler weather in which electricity demand falls, and addition of more than 15 power plants in the last two years, say PDB officials. Even last year, the custodian of electricity had to impose an hourly load-shedding, causing widespread commotion among citizens.
Understandably, the PDB is found to be buoyed by the latest on the rental power sector, which got off to a miserable start after the government went for a desperate move to salvage the country's grave electricity crisis.
Industry watchers said the PDB has learnt from its mistakes in handling rental power deals.
The PDB had incorporated certain clauses in contracts with the power companies so that they take their contracts more seriously, an observer said. In the past, the companies had not only failed to launch their power plants in time but also resorted to court injunctions over payment of penalties.
The rental power investors now know a failure can be way too costly. The PDB has already realised a Tk 210 crore penalty from different rental power companies over failure in meeting contractual deadlines without valid reasons, a top official said.
The PDB expects that due to this stringent measure, most of its two dozen rental power projects will come into operation by August. It is also set to scrap a few deals for absolute failure of the contractors.
More than a dozen rental power companies are facing penalty notices for their failures. Some power companies have reasoned with the PDB and paid their penalties, while some others have either appealed to the PDB to waive the penalty on grounds of "force majeure" or other causes or have turned to court.
Among those who paid penalties are Quantum Power of Otobi which paid over Tk 64 crore for missing the deadlines for launching two 100 MW power plants by many months. Both these plants are now in operation.
Desh Energy has paid nearly Tk 40 crore for missing the deadline of its 100 MW plant in Siddhirganj by around four months.
British company Aggreko had paid Tk 3.5 crore for missing the deadline of its 100 MW Ghorashal plant by 20 days.
Hyperion Power Ltd, which was supposed to launch a 100 MW plant at Meghnaghat early this year, was served with a notice for around Tk 40 crore fine. It paid around Tk 5 crore and then turned to the High Court which stopped further payment of penalty for the time being. According to the PDB, the progress of work at Hyperion's Meghnaghat site is pitiable and it is unlikely to be launched ever.
Besides, the PDB served penalty notices on Summit Narayanganj, Khulna Power Company, IEL Consortium, Aggreko, Dutch Bangla Power, Acorn Infrastructure, Sinha Power, Northern Power Solution and Max Power. All of them however claimed that they were not responsible for missing their deadlines.
A PDB high official said, “Not all of them are really at fault for missing their deadlines. If they have valid grounds, we will forgo our claims."
A PDB committee reviews the explanations for delay submitted by the defaulting companies. They explained that their delay was due to the PDB's delay in handing over land, providing power evacuation facility or other matters for which they were not responsible.
The PDB committee makes recommendations concerning whether penalty should be waived or reduced, and places those before the board. The board upon approval sends those to the power ministry.
Through such practice, the PDB has exempted penalty imposed on Max Power. The company has failed to launch its plant in time crossing the deadline by several months because the ship that brought in power plant equipment was attacked by pirates. Three persons were killed and many of its equipment were damaged.
The PDB also waived penalty on IEL Consortium and Aggreko for their Meghnaghat and Brahmanbaria plants. It could not provide power evacuation facility to IEL and land to Aggreko in time. Both these plants have launched operation. The IEL plant will be inaugurated by the prime minister next week.
All these penalty issues however angered some of the defaulting power companies that have political connections.
At a recent meeting of the parliamentary standing committee concerned, representatives of these companies which include one owned by a lawmaker came down heavily on the PDB for "not patronising local entrepreneurs" by imposing penalty. But government officials watered down the heat saying they were realising penalty as per the prime minister's instructions.