The Finance Ministry has agreed in principle to give the Power Development Board up to Tk 756 crore as subsidy for buying electricity from the recently approved 50MW Shikalbaha Rental Power Plant in Chittagong, officials of Power Division said.

   The finance secretary, Mohammad Tareq, in a reply to a letter of the power secretary, M Fouzul Kabir Khan, said the ministry took the decision to provide the subsidy for electricity purchase, asking the PDB not to buy power for more than three years.
   Earlier on December 5, Fouzul sent the letter to finance secretary seeking assurance for the subsidy before the PDB strike a deal with the rental power.
   The PDB will sign an agreement with the Royce Power Engineering of Hong Kong and the Asian Entech Power Corporation of Bangladesh on December 28 for purchasing electricity.
   The companies became the lowest bidder offering a tariff rate of 12.8 cents or Tk 8.77 per unit of power from the furnace-oil-based plant to be installed in joint-venture by six months.
   The cabinet purchase committee, headed by finance adviser AB Mirza Azizul Islam, at a meeting held recently endorsed the joint-venture that became the lowest bidder in power tariff rate.
   ‘The PDB sought assurance of providing the subsidy as it will incur a loss of around Tk 21 crore each month by purchasing power from the rental power plant and it will sell electricity to power agencies for supplying to consumers at a rate of around Tk 2.41 per unit,’ said an official of the Power Division.
   ‘PDB will need around Tk 756 crore as subsidies for purchasing electricity from the rental power plant. The amount of subsidy could come down if the price of furnace oil was reduced.
   The Finance Ministry asked PDB to send details of the amount of power it will purchase from the plant and the money required for the purchase.
   The interim government took a decision to install the furnace-oil-based Shikalbaha rental power plant at Chittagong due to shortage of gas supply in the port city. The electricity production cost of fuel-oil-based plant is much higher than that of the gas-based plants.
   As the gas-based power plants of PDB are struggling with generating power to their capacity due to gas supply shortage, business people in Chittagong were demanding an alternative fuel-based power plant in their area.

Source: The New Nation