Economy
United Group power plants getting gas at concessional rate, but selling electricity at commercial rate to EPZs
Two private power plants have been receiving gas supply from the two subsidiaries of the state-owned Petrobangla at public power plant’s rate, but after producing electricity, selling it at commercial rate to two export processing zones (EPZs).
According to official sources, these two power plants belong to United Group and those were set up in 2008 under its commercial venture of United Power Generation and Distribution Company Ltd (UPGDL).
The 86 MW plant was set up for Dhaka EPZ and getting gas from Titas Gas Transmission and Distribution Company while 72 MW was installed to supply power to Chattagram EPZ and receiving gas from Karnaphuli Gas Distribution Co.Ltd.
Officials of the state-owned Bangladesh Power Development (BPDB) alleged that such a business by the United Group is totally unethical and also contrary to the existing law which does not allow a private firm to receive gas from Petrobangla at power plant rate, but sell the produced electricity to consumers at commercial rate.
Interestingly, the United Group sells the electricity at the weekend to the BPDB as an IPP at the power plant rate when the industries in the two EPZs remain closed.
The officials said the BPDB has been depriving a profit of Tk 800 crore annually due to this illogical business by the United Group. Instead, such profit is going to the account of the United Group.
They said the BPDB has been acting as a single buyer in the power sector which buys electricity from private and public power plants and sells those to the distribution companies and then the distribution companies sell the electricity to the retail consumers.
Beyond the BPDB, Rural Electrification Board (REB) has also been buying electricity from a few numbers of private power plants and also sells electricity to retail level consumers through its affiliated Palli Bidduyt Samities.
A top official of the BPDB informed that after raising the gas price by the government to Tk 15.75 per unit for power plants and Tk 30 for captive power plants, the United Group’s profit margin goes up.
Because, he said, as a captive power producer category, United Group is supposed to pay the gas bill at Tk 30.75 per unit. But it is now paying a gas bill at Tk 15.75 per unit.
In contrast, it is selling electricity to the Dhaka EPZ and Chattagram EPZ at a commercial rate of about Tk 10.88.
The BPDB official also mentioned that if the United Group buys gas at power plant rate, its electricity should be sold at Tk 5.5 per unit to the BPDB and then BPDB will sell to a distribution company to sell to the EPZs.
Another official said that the BPDB has been supplying electricity to the export processing zones from the very beginning.
But surprisingly, United Group came out to the market with the influence of high ups of the then government and managed the Bangladesh Export Processing Zones Authority (BEPZA) to buy electricity from the group instead of BPDB or any other state-owned distribution company.
The BPDB officials also alleged that the BEPZA, as a state-owned entity, has been purchasing electricity without any competitive bidding process which also a violation of the Public Procurement Act 2006 and Public Procurement Rule 2008.
About the allegation Hasan Mahmood Raja, originally who is owner of the United Group and now its advisor, said his group has been doing business with the two EPZs of the BEPZA fully in compliance with the existing rule.
“Nothing is in violation of the existing government’s law and BEPZA is purchasing electricity as United Group gives it a guarantee for uninterrupted power supply”, he told UNB.
He, however, admitted that the deal between the BEPZA and the United Group was done without a competitive bidding process.
The Kazipara and Mirpur-10 metro stations, which have been closed, are expected to reopen by the end of September, though the exact date has not yet been confirmed. Mohammad Abdur Rauf, Managing Director of Dhaka Mass Transit Company Limited (DMTCL), told TBS that a technical team has been tasked with resolving the issues at the stations.
“We are working to reopen the two stations within this month, but I cannot give a specific launch date yet. We will hold a meeting with the technical team and other stakeholders soon to review the progress. A decision is likely on 18 September,” Rauf said.
He noted that Kazipara station is likely to open earlier due to less severe damage, while Mirpur-10 may face delays as it requires machinery that needs to be imported.
Additionally, Rauf mentioned plans to begin metro rail operations on Fridays starting from 20 September, with efforts being made to meet this timeline.
Dr. Muhammad Yunus, the Chief Adviser of the interim government, has announced the formation of six commissions as an initial step toward reforms, including constitutional amendments. These commissions are expected to begin operations on 1 October and complete their work within three months.
In an address to the nation on Wednesday evening (11 September) from the Chief Adviser’s Office, Yunus outlined the government’s reform agenda. This is his second national address since taking office on 8 August.
Yunus explained that the formation of the six commissions is the first step in a broader plan for constitutional reform. He stated that the commissions would be led by six distinguished citizens, selected based on their expertise. These commissions will tackle various reform areas, and more will be established in the future.
Emphasizing the importance of constitutional reforms for free and fair elections, Yunus stated, “We believe that imposing majority rule through elections, resulting in misgovernance or consolidating all power into the hands of one person, family, or group, is unacceptable. To prevent this, we are considering reforms to institutions like the Election Commission and others involved in the election process. Reforming the police administration, civil service, judiciary, and Anti-Corruption Commission is essential for ensuring fair and transparent elections. These reforms will also contribute to establishing a state system based on public ownership, accountability, and welfare.”
Yunus announced the names of the six commission heads:
- Dr. Badiul Alam Majumdar will lead the Election System Reform Commission.
- Sarfaraz Chowdhury will head the Police Administration Reform Commission.
- Justice Shah Abu Naeem Mominur Rahman will lead the Judiciary Reform Commission.
- Dr. Iftekharuzzaman will lead the Anti-Corruption Reform Commission.
- Abdul Muid Chowdhury will head the Public Administration Reform Commission.
- Dr. Shahdeen Malik will lead the Constitutional Reform Commission.
The Chief Adviser mentioned that the other members of these commissions would be determined in consultation with the heads. Additionally, representatives from the advisory council, students, workers, social movements, civil society, and political parties will participate in the commissions’ discussions.
Yunus expressed hope that the commissions would be fully operational by 1 October and complete their work within three months. Based on the commissions’ reports, the government plans to organize consultations with major political parties. A broad consultation, lasting three to seven days, involving students, civil society, political party representatives, and the government will follow. This consultation will finalize the reform framework and outline its implementation strategy.
Yunus concluded by stating that this initiative will unify the nation, fulfilling the demands of the July uprising and strengthening the country with renewed hope and optimism.
The Foreign Investors’ Chamber of Commerce and Industry (FICCI) has urged the Bangladesh government to implement a more investment-friendly tax structure to enhance foreign investor confidence.
During a meeting on Wednesday (11 September) with the newly appointed chairman of the National Board of Revenue (NBR), Abdur Rahman Khan, FICCI leaders highlighted the need for comprehensive tax reforms that would position Bangladesh as a more attractive destination for foreign direct investment (FDI) and strengthen the national economy.
Zaved Akhtar, President of FICCI, stressed the significance of fully digitising NBR operations, particularly by advancing automation systems to maximise revenue collection, as outlined in the chamber’s press release.
The delegation also recommended the establishment of a dedicated research unit within the NBR to broaden the tax base and increase revenue through in-depth market analysis, identifying gaps between market share and revenue generation.
NBR Chairman Abdur Rahman Khan acknowledged the importance of automation in stimulating economic progress and welcomed FICCI’s research findings on the taxation landscape.
FICCI’s delegation included Senior Vice President Eric M. Walker, other board members, and senior officials from member companies, alongside key officials from the NBR.
