The Planning Commission has put on hold its approval of a reportedly 'politically considered' Tk 55 billion electricity distribution project in the rural areas as the government does not have adequate funds to bankroll such a high-cost project.
Planning Commission (PC) officials said Thursday they have asked the Power Division to look for funds from donors for the country's costliest-ever distribution line project as the government is now not in a position to finance project from its own resources.
A month back, Power Division (PD) sent a Tk 54.40 billon project proposal titled "expansion of 18 million consumers in the rural areas" to the PC, seeking the approval of the Executive Committee of the National Economic Council (ECNEC).
Under the proposed project, the Rural Electrification Board (REB) is to implement the project, taking the entire funds from domestic resources.
The state-owned REB has designed its single-largest Tk 54.40 billion project for installing 45,000 kilometres of new distribution lines, 150 kilometres in each of the constituency, across the country, officials said.
"We have informed the Power Division to find out foreign lenders first and then send it to the Planning Commission for getting its approval," a senior PC official told the FE.
"If the REB can mobilise a major portion of the required Tk 54.40 billion cost from external resources for the proposed project, then we can consider it for approval", he said requesting for anonymity.
A senior Power Division official admitted the PC's directive and said, "We will now wait for our higher authorities' instruction for taking the next action on the electricity distribution line expansion project."
Another Planning Commission official said: "The project is not feasible as the REB has been implementing seven projects involving a total cost of Tk 37.33 billion for expanding 0.175 million kilometres of distribution line and adding nearly 1.5 million new consumers."
"Besides, the country is still suffering from nearly 1500-mwgawatt (mw) of power shortage a day. Is it justifiable to take up such similar fresh projects amid the present circumstances?" he wondered.
A high REB official said: "As per instruction from the government authorities and pressure from the Members of Parliament and political leaders, we have undertaken the project and sent it to the PC through Power Division for getting its approval."
"Since Bangladesh's a large part of the population are still out of grid power, we have decided to ensure access of the rural people to electricity as the country's power generation will reach up to over 7000mw by 2012," a top Power Division official said.
Through the proposed project, REB will install nearly 45,000 kilometres of distribution line in its 70 Palli Bidyut Samity (electric cooperative association) units in a bid to connect 1.8 million new consumers by fiscal 2014-15.
The REB official said once the proposed project is implemented some 800mw of extra power would be required in the national grid.
The Power Division official has, however, raised questions about the capacity of the REB in implementing such a huge project as the state-owned electricity distributor has already been executing seven other similar kinds of schemes.
He said: "REB has capacity to spend Tk 5.00 to Tk 6.00 billion in funds annually against all its projects. How will it enhance its capacity to spend more than Tk 25 billion funds a year?"
Out of the seven ongoing distribution line expansion projects of the REB, the ECNEC approved six schemes in last fiscal year (FY), 2010-11 and the rest were approved in the previous fiscal.
