Bangladesh Defense
Saif
Senior Member
- Jan 24, 2024
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Govt should rethink power, fuel privatisation plans
THE government mulls over privatising power distribution and petroleum product import. The power, energy and mineral resources minister, at a policy conclave in Dhaka on July 22, said that the objective of the move is to reduce the financial burden on the national exchequer by placing retail energy services in the private sector. The minister has said that the government can generate electricity and sell it in bulk, but the private sector should handle the distribution. The minister has also asked why the government should always import petroleum products and said that the private sector should be allowed to do this. He has said that competition will reduce the burden on the government, noting that the government has inherited Tk 670 billion in unpaid electricity bills that have caused a significant burden on the exchequer. The move also appears to be a consequence of the concerns that business leaders, energy experts and international lenders have for long raised over disruption in gas and electricity supply. They have urged the government to intervene to tackle the constraining energy crisis and attract investment with immediate policy reforms.
The move to shift power distribution and fuel import, as the government envisages, may resolve the public side of the problem, but the private handling of the distribution and import may, understandably, further burden consumers. Whilst the private distribution of power and the import of fuel may strain consumers, the move could also inconvenience the government as energy sovereignty — the ability to secure reliable, affordable and sustainable energy whilst minimising dependence on external sources and volatile global markets — could be at stake. Industries need gas and power as they have invested millions of takas in industrial units, even inside the economic zones, but cannot run to full capacity because of supply shortages. Titas Gas Transmission and Distribution Company says that applications for more than 1,100 industrial gas connections are pending. Banks, in turn, have been in a tight spot as they have extended billions of takas in loans and the money lent has been tied up in industrial projects that need gas connections. Problems with the energy supply may ultimately weaken both the industries and the banks. Business leaders say that the challenge for modern manufacturing is no longer only energy availability but the reliability and quality of energy, the lack of which creates a wave of uncertainty and inflates operating costs.
The solution to such a problem is not the privatisation of electricity distribution and fuel import. Policies on the energy mix, greater dependence on renewable energy and the judicious use of energy could offer a resolution. The government should, in such a situation, rethink its decision on the privatisation of electricity distribution and fuel import.
THE government mulls over privatising power distribution and petroleum product import. The power, energy and mineral resources minister, at a policy conclave in Dhaka on July 22, said that the objective of the move is to reduce the financial burden on the national exchequer by placing retail energy services in the private sector. The minister has said that the government can generate electricity and sell it in bulk, but the private sector should handle the distribution. The minister has also asked why the government should always import petroleum products and said that the private sector should be allowed to do this. He has said that competition will reduce the burden on the government, noting that the government has inherited Tk 670 billion in unpaid electricity bills that have caused a significant burden on the exchequer. The move also appears to be a consequence of the concerns that business leaders, energy experts and international lenders have for long raised over disruption in gas and electricity supply. They have urged the government to intervene to tackle the constraining energy crisis and attract investment with immediate policy reforms.
The move to shift power distribution and fuel import, as the government envisages, may resolve the public side of the problem, but the private handling of the distribution and import may, understandably, further burden consumers. Whilst the private distribution of power and the import of fuel may strain consumers, the move could also inconvenience the government as energy sovereignty — the ability to secure reliable, affordable and sustainable energy whilst minimising dependence on external sources and volatile global markets — could be at stake. Industries need gas and power as they have invested millions of takas in industrial units, even inside the economic zones, but cannot run to full capacity because of supply shortages. Titas Gas Transmission and Distribution Company says that applications for more than 1,100 industrial gas connections are pending. Banks, in turn, have been in a tight spot as they have extended billions of takas in loans and the money lent has been tied up in industrial projects that need gas connections. Problems with the energy supply may ultimately weaken both the industries and the banks. Business leaders say that the challenge for modern manufacturing is no longer only energy availability but the reliability and quality of energy, the lack of which creates a wave of uncertainty and inflates operating costs.
The solution to such a problem is not the privatisation of electricity distribution and fuel import. Policies on the energy mix, greater dependence on renewable energy and the judicious use of energy could offer a resolution. The government should, in such a situation, rethink its decision on the privatisation of electricity distribution and fuel import.
