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.
