Open Pit Mining must start in Phulbari

ET Report
Prof. Hossain Mansur of Geology Department of Dhaka University said that appropriate initiative must be taken without delay to explore and exploit coal as alternative fuel to ensure the required power generation in accordance with the election pledge of Awami League. For this, he said, the decision for open pit mining to extract coal from Phulbari is required to be taken on priority basis.
“But to work out the modality, the government must set up a high powered committee now comprising of representatives of Asia Energy, civil society who are opposed to mining at Phulbari and line professionals,” he told the Energy & Power
The EP Editor Mollah Amzad Hossain took the interview of Prof. Hossain Mansur, who is also an ex chairman of Petrobnagla. Following are the excerpts:
EP: What’s your observation about the energy infrastructure development plans or guidelines of Awami League– having proven track record of successfully managing energy sector from 1996-2001– which has returned to state power?
HM: Let us have an objective view of election agenda before making subjective analysis. Possibly this is for the first time since liberation of Bangladesh any political party formally declared well defined short, medium and long term planning for developing energy infrastructure to confront prevailing and emerging energy crisis.
It has been planned to generate additional 5000 MW power in the next 5 years. Generation from different viable alternatives– natural gas, coal, nuclear and renewable source have been envisioned in the plan. Party energy vision till 2021 has also been included there.
Government has spent only about 50 days in state power. There cannot be any doubt about the competence of the persons entrusted to implement the plan. Moreover, Prime Minister herself is monitoring it. But for this the implementing agencies have not been restructured yet. I hope this will be done soon.
Everyone is aware about prevailing crisis of competent professionals in the energy sector. Resolving this crisis is also a major challenge for the new government. Engaging an energy expert as advisor of energy sector during caretaker government was also a right decision.
EP: Do you think the government’s plan to engage an expert committee for this sector will create positive impact?
HM: I think it to be a good initiative of the Prime Minister. Committee formed with real energy experts of the country will definitely bring positive impact.
EP: There are court cases against PM Sheikh Hasina and ex PM Khaleda Zia regarding NIKO-BAPEX joint venture for marginal gas field development. What are your views about it?
HM: Head of the government has prerogative to approve any decision in the greater interest of the country. PMs considered this agreement as beneficial for the country. These cases are purely political.
If there has to be any genuine case of corruption in energy sector that has to be for leasing out Jalalabad gas field. BNP government handed over a discovered gas field to Occidental for a mere 22 million US dollars. But the government now has already purchased 24,000 US$ worth of gas from this field.
EP: Oil Gas & Port Protection Committee claims that there had been major irregularities in Niko agreement. You are associated with their movement. Now you are telling there was no irregularity. Then why you are still with their movement?
HM: Look the committee has several unreasonable demands like opposing offshore exploration; open pit coal mining. Niko is also one such. I don’t agree with the committee on these. It is not possible as an expert to agree with them on these issues.
But I worked with them to resist export of natural gas. I am with them on this. I am trying to make them understand their mistakes.
The left politicians who are staging agitation on oil, gas and port protection know it very well that they will never come to state power. That is why they have taken negative stand on reasonable issues.
EP: Let us again discuss on election pledges of Awami League. Do you think it is possible for the government to realize the pledge?
HM: Look in 1996 when Awami League came to power the government also inherited similar crisis situation in energy sector. Concurrently with expediting ongoing projects government encouraged massive gas exploration initiatives. Moulvibazar gas field was discovered. World Class Bibiyana gas field was also discovered. Sangu offshore gas field was brought into production. BAPEX developed Salda Nadi Gas Field.
On the other hand new power plants were set up after finalizing IPP policy within very short time. Side by side private sector power plants were also set up. For these actions generation increased from effective capacity of 1,500 to 3,000 MW. Consequently first three years of BNP government did not witness any crisis although they failed to set up a new plant during that time.
Now when Awami League led government is again in power the installed capacity of power is 5,450 MW. Some of the aging plants are derated so the real installed capacity is now reduced to 4,950 MW. For ongoing maintenance 680 MW can not be generated. Gas supply crisis also impedes generation of about 500-700 MW. So the available effective generation capacity is now 3,600-3,800 MW. This is not much different to what Awami League government left behind in 2001.
During the last term of Awami League government there was no crisis of gas supply. There was demand supply balance… I mean security of supply in the national gas grid. But now when public and private sectors have plans to set up power plants having capacity of 3,000 MW Petrobangla can not guarantee gas supply to more than 1,000 MW generation. So power generation as per its declared vision is a great challenge for the government. So not only actions for increasing power generation but also actions to source fuel for power are also major challenge. Even a single day must not be wasted in hesitating and sitting on decisions.
In my opinion if the government sincerely intends to realize its election pledge in energy sector it must take decision for offshore exploration in the Bay of Bengal as soon as possible.
On the other hand, appropriate planning needs to be made reviewing the situation whether gas supply will be possible to all planned gas based power plants. If there is uncertainty these must be dual fuel plants.
As a geologist I am optimistic that more gas fields will be discovered in Bangladesh. But natural gas alone can not meet the requirement of power generation. We must diversify fuel option. We need coal. This is our only major viable option. Import of hydro electricity is another option. There is scope for nuclear power generation also. We have to work on renewable power generation. But renewable energy cannot be a substitute for fossil fuel based power generation.
Government alone do not have resources or capacity for required power generation. We have to rely on private sector investment from both local and foreign sources. So we must identify areas of energy value chain for foreign direct investment keeping our national interest above everything.
EP: Will you elaborate your opinion on feasibility of alternative fuels other than coal that you have mentioned.
HM: There is very little scope to expand our own hydroelectricity generation. But hydroelectricity import is only possible through regional initiatives. It has to come from Nepal and Bhutan. Both the countries have enormous hydroelectricity generation potential. India is currently importing power from them.
Bangladesh has to take political decision and try to catalyze four-nation joint initiative to import hydroelectricity. It is a long-term option.
The government has taken some initiative for nuclear power generation. But environmentalists are divided in opinion on nuclear power generation. Government must keep this into consideration also.
EP: You have said that coal is the only feasible option. But we are locked in various debates regarding coal exploration. How exploration can start resolving the current impasse?
HM: Please remember Bangladesh has 2.5 billion tonnes of proven coal reserves. It is possible with available technology to extract at least 1 billion tonne. Exploration from the largest reserve Jamalganj is not commercially viable in traditional method. We are mining coal from Barapukuria by underground method. But due to wrong decision we can only extract about 5 million tonne by 2011. This underground mine will create massive depression and subsidence in the mine area. It can never be restored and rehabilitated. The subsidence process has already commenced. Due to wrong decision it will not be possible to even extract 20-25% coal in place. It will be unwise to set up any new coal fired power plant based on Barapukuria coal.
EP: So you are saying exploration of coal in Barapukuria by underground method is a wrong decision?
HM: Look I am a geologist. Bangladesh geology in the mine area does not support underground mining. If we like to mine commercially it has to be open cut method only for shallow coalmines. Water management is major challenge here. Open pit mining can support recovery of 90% coal in place. In 5-10 years most of the mine area can be restored to original state. Only the final pit about 20% can be converted to a sweet water lake. This will be a massive asset for Bangladesh, a major source of power generation and other use.
It should be mentioned here that 1,400 crore taka has already been spent to develop Barapukuria mine and 1,600 crore taka has been spent to set up mine mouth power plant. But due to inappropriate mining method the investment is under great risk. The property and assets of the people of the region are endangered.
EP: You are telling Bangladesh should follow open pit mining method to explore coal. But, the Oil, Coal and Port Protection Committee is opposed to it.
HM: Look the movement was not against open pit mining. The committee movement was basically due to lack of trust on the then government. Actually it was not mining method rather it was lack of trust on the 4 party alliance government which crystallized the movement.
EP: But it is being told resettlement is a huge problem in case of open pit mining. How do you think about it?
HM: There is international law. Bangladesh also has land acquisition rule. Our neighbour India has extensive experience of open pit mining. In Bangladesh about 3-3.5 lakh people may need to be rehabilitated from mining region for open pit mining for development of all the mines. For a democratic government it may not be a major challenge considering the overall national benefits that availability of huge coal resource and its manifold use would bring about good impacts.
EP: You are suggesting steps to start coal mining must be taken without wasting a day even. How it is possible? Where exploration should start at first?
HM: I believe action to set up coal based power plant installation must start if possible from today. To make coal based power available mining must start at Phulbari first. The reason behind this is that only Phulbari mine is now ready after discovery and other extensive studies.
I also believe that exploration of natural resource will invariably have environmental and social impacts. There will not be any exception here also. But all actions must be taken to mine coal making minimum impact on environment and protecting the rights of affected population.
EP: In that case which company will implement Phulbari Mining? The government has an agreement with Asia Energy.
HM: After signing an agreement there is no scope to disoblige it. It could be more appropriate if an agreement like PSC with provision for cost recovery and exploration-exploitation could be concluded. That would have better protected Bangladesh interest.
On the other hand it has to be decided upon discussion whether Asia Energy or government will carry out open pit mining at Phulabri. But we must keep in mind that extensive government support is a must for mining by Asia Energy or any other company at Phulbari.
EP: Then what you suggest to make the start?
HM: Decision should be taken by the government constituted high powered committee comprising of Asia Energy, agitating civil society representative right now on Phulbari mine development. If necessary the government may seek assistance from Australia, Germany and of India who have vast mining experience. These countries have extensive expertise and experience of coal mining.
Simultaneously the government must finalize the coal policy eliminating provision of coal export. There is no scope to waste time waiting for coal policy anymore.
EP: So are you talking about mining at Khalaspeer and Dighipara also?
HM: Not at all. I have talked about Phulbari only. The alliance government awarded the lease permission to a Bangladeshi-Chinese JV for Khalaspeer without inviting tender. This must be investigated. No initiative should be taken for mining before proper investigation. Petrobnangla has also signed MOU with a Korean Company for mining at Dighipara. It should also be investigated. Without tender no mining lease should be given to anyone anymore.
EP: What are your views on proposed tri-nation gas pipeline and other regional energy cooperation initiatives?
HM: It was a wrong decision for Bangladesh not to proceeding with the tri-nation gas pipeline initiative. Besides, Bangladesh must actively participate in other SAARC, BIMSTEC, Central Asian and Middle Eastern energy ring and grid projects. This must be done in view of our long-term energy security.
Courtesy: Energy & Power
Link: http://www.weeklyeconomictimes.com/news-details.php?recordID=3455

Energy crisis: Use of coal should be top priority

Shamsul Huq Zahid

The Petrobangla, the state-owned oil and gas entity, might soon suggest the government to allow the import of liquefied natural gas (LNG) by the private sector to help offset the energy crisis which might soon become unmanageable, particularly in the Chittagong region.

What can be more frustrating than exploring the possibility of LNG import for a country which once thought to be floating on natural gas? Local and foreign experts throughout the nineties dished out varying estimates on the country’s gas reserve. The giant neighbour, India, showed keen interest to import gas from Bangladesh and the USA on behalf of its oil companies engaged in gas extraction here started pushing hard the idea of gas export.

A strong nationwide debate over gas export surfaced with the two main political parties which have the habit of picking up quarrel even over non-issues took up opposing stands. Some experts announced their strong resistance to any gas export move. But the warring groups actually were not aware of the actual situation with country’s gas reserve. However, the strong debate over gas export issue has saved the country from getting into deep trouble and the political governments from embarrassment.

It did not take too long a time to know that the current proven reserve would be exhausted with next six to seven years. All the rosy projections, particularly made by the US Geological Survey, proved wrong. Bangladesh is already in the midst of a gas crisis which might aggravate further in the next few years. The gas-based power plants and industrial units cannot utilize their full capacity due to gas scarcity. The worst-affected is the Chittagong region. Power plants and industrial units in the region remain gas starved because of the short supply of the same. The production at the Sangu, the country’s lone offshore gas field, has declined drastically, by nearly 75 per cent, because of the depleting reserve. A good number of newly installed industrial units are not being able to start commercial production since the authorities concerned have stopped providing new gas connections. The delay has thrown sponsors of these mills and factories into great financial difficulties.

The gas short-supply has made the power situation worse; the power deficit has now reached more than 1500 megawatt (MW). The present government has promised to enhance power production substantially. But the gas shortage is likely to make it difficult for the government to get its electoral pledge relating to power production fulfilled.

Unless new gas reserves in adequate volume are found soon, the country’s economic growth stands to suffer seriously. There are lots of talks about finding alternative energy sources, including installation of nuclear power plant. But getting the same in place might prove very expensive for an economy of small means like that of Bangladesh.

Then what is the way out? How can we ensure generation of enough power and, at the same time, supply of gas to industries and domestic consumers?

The Petrobangla’s proposition to import LNG by the private sector does not seem feasible because of the cost factor. The cost of import and re-gasification would make LNG unattractive to its intended buyers. Moreover, the cost involved in setting up a re-gasification, nearly $2.0 billion, seems exorbitant. It is unlikely that the government has the money to build such an expensive plant. Neither there will be any local private entrepreneur interested in building the same.

The only feasible option left before the country is the setting up of coal-based power plants. Bangladesh has substantial deposit of quality coal. It is now extracting coal from one coalmine at Barapukuria through the traditional method. The extraction of coal from a large coalmine at Phulbari has remained stalled due to controversy over the method of coal extraction. In the absence of an official coal policy, experts as well as politicians are now engaged in a heated debate over the methods of coal extraction-open-pit or traditional tunnel systems. The open-pit extraction ensures nearly full exploitation of the coal reserve but not without a cost. It displaces population settlements, destroys arable land and causes other environmental degradation. It seems that for fear of political fallouts, the government has dragging its feet on the issue of coal extraction from the Phulbari coalmine.

But the time is running out fast. The government has to make a firm decision on the Phulbari coal and start extracting the same as early as possible. This is all the more necessary not to earn foreign currency by exporting coal but to start using the same for generating power.

The country at the moment has only one coal-fired power plant at Barapukuria. The plant has been set up by a company from the People’s Republic of China, the world’s largest producer of coal-based power.

The government must not waste anymore time on the coal extraction issue. It should ask the foreign company concerned to start extracting coal from Phulbari and, in the meanwhile, start making arrangements for setting up coal-based power plants. Many private entrepreneurs will be interested in setting up the same.

Link: http://www.thefinancialexpress-bd.com/2009/03/09/60794.html

Overcoming the bleak power generation scenario

Md. Asadullah Khan

THE power generation scenario with the onset of this summer season is going from bad to worse. It has been learnt from the PDB sources that the country’s average power generation capacity has come down to 3700 megawatts as against the demand of 4350 megawatts. But unofficially the demand curve exceeds 5000 megawatts. Special Assistant to the Chief Adviser on Power and Energy Professor M.Tamim said in a recent press briefing that the shortage of power at the moment is more due to transmission problem than generational. It has been further learnt that constraints in supplying gas from Bibiyana and Jalalabad gas fields to power plants at Ghorasal, Siddhirganj and Chittagong now stands in the way of enhancing power generation. Shockingly, as Professor Tamim said, the move taken in 2005 to install 4 (four) compressors at the national grid with the assistance of ADB for increasing gas pressure did not materialise. Compounding the problem is the sudden drop of gas extraction from the only offshore gas field Sangu which Cairn Energy plc, the operator of the gas field, failed to ascertain earlier. Further, their effort to extract gas from other wells including Mognama and Hatiya has not met with success.

The country now needs 190 crore cft of gas and production at the moment goes to the extent of 177 crore and 50 lakh cft out of which 68 crore cft is being provided for generation of power but for the power sector to operate without disruption, there is need to raise the gas supply to at least 78 crore cft. Moreover, if the rental power plants, as planned earlier add up another 200 megawatts to the national grid in the next month , power sector will need another 11 crore cft of gas. But the snag in the distribution channel has possibly shattered all hopes for a brighter future.

Undeniably true, energy plays an important role in accelerating economic growth as much as it serves as an important tool in providing basic needs like food, shelter, health care, safe water, sanitation, education and access to job for either an individual, or the whole community. ‘Sustainable human development’ that means economic growth through equitable distribution of benefits can only be ensured through the availability of energy needs of the nation. Reports have it that in developing countries where per capita commercial energy consumption is below 1000 kg of oil equivalent (KGOE) per year, poverty predominates with the concomitant vices of illiteracy, population growth and infant mortality.

It is worth recalling the planning process that leaders of most of the advanced countries including Soviet Union adopted after the revolution : Soon after the Russian Revolution, the Soviet Union declared that education and electricity — the two E’s — were the eyes of the country. In a similar vein, most countries in Africa and Asia after their liberation from the colonial rulers in a bid to rebuild their countries waged war on two fronts: education and electricity, considered most vital for any country to rise above the depths of abysmal poverty situation.

Bangladesh is different. Unfortunately for us, the trauma experienced during the liberation war and the hope and optimism exhibited during the initial years did not ignite us to rebuild the country with meticulous planning and vision. In consequence the country lurched from one crisis to another.

Shockingly, it was because of bad governance, closed vision and sinister greed of the functionaries in the past, specially in the last five years that the whole country turned into a crisis zone with people crying for power to irrigate their fields. And now Munshiganj and Chandpur people find no ways to save their potatoes from getting perished for lack of power in the cold storage. Appallingly, it is only due to inadequate supply of power and frequent load shedding, that a sizable portion of the 20 lakh metric tons of potatoes already put in the cold storage will be wasted, let alone another 50 lakh metric tons that would perish on the road side. The situation came to such a pass because the country’s power generation and more specifically the distribution system, as Prof. Tamim has said in a recent press briefing, remains very poor at almost all the places because the immediate past government never undertook a timely project to upgrade either the generating plants or the transmission system.

As per the plan of the government at that time, the private sector sponsors were expected to set up about 45 small power plants and the government would purchase electricity from these plants at a negotiated tariff. But objections were raised by the WB about the selection process on the issue of transparency as the selectors were given discretionary power to qualify or disqualify a sponsor. Even these days as reports published in the newspapers indicate the rental power plants that were supposed to add 260 megawatts by May, 08 are unlikely to meet that demand. Only a lone 20 MW plant at Bogra might go into operation during this time frame.

With fossil fuel becoming scarcer and its price shooting up almost every day, the planners and decision makers must look for alternative source of power to keep the present decrepit and stagnant economy running. And the answer is perhaps blowing in the wind.

Wind is now the world’s fastest growing power source — a high tech challenge to the coal mines, oil rigs, gas wells, nuclear reactors and hydroelectric dams. Experts say wind could provide up to 12 per cent of the earth’s electricity within two decades. J. Michael Davis, chief of the renewable Energy programmes at the US Department of Energy said enthusiastically at the beginning of the new millennium “ Today’s models in the US are capable of meeting 10 per cent of America’s energy demand and within 30 years, newer versions could provide for a quarter of the US’s power needs. Reports have it that machines that produced energy at 7 cents per KW in California in 1996 have now brought down the cost to 4 cents. More advanced designs are likely to stave off another cent.

American technology in wind power dates back to1900, when most of the electricity on US farms was provided by windmills. To meet an ever increasing demand due to increasing number of households as well as to safeguard the entrenched interest of the administration in oil business, these were replaced during the 1930s when Rural Electrification Board wired the countryside. But the technology staged a comeback when oil embargoes and environmental concerns prodded the politicians to look for alternative sources. With trials one after another, California in particular became the nursery of advanced technology.

In their case it is the choice of technology, in our case it is the desperate need to opt for alternative source of power when oil import price continues to shoot up every day and indigenous gas resources do not seem to be as promising as touted in the 90s. At the moment exploitation of wind energy or at the farthest end tapping of solar energy seems most feasible and a viable option in view of the availability of vast coastal areas of the country that offer bright prospect of harnessing power through setting up of wind mills in those locations.

The promise that wind offers is tantalizing. Windmills generate renewable power, so called because the source of the energy, wind is continually renewed by nature. So is the case of solar cells, which are powered by the sun — geothermal systems which use the earth’s heat and hydroelectricity which flows from dams. Interestingly, India has switched over to second position achieving production capacity of more than 3000 MW through harnessing wind power. Encouragingly, technological advances that are now available are likely to make wind power more appealing. Engineers plan to boost the tower so that machines can escape ground turbulence and tap more consistent winds. Lighter materials that are now available could reduce the cost of building the towers. And researchers are looking into ways to store excess energy produced during windy periods so that it could be used during calmer days or during peak energy demand.

Speaking about solar energy, it has already gained acceptability. During my visit to Sidr-hit areas namely, Shyamnagore, Gabura, Patakhali and Neel Dumur in the Satkhira district bordering the Sundarbans last November, I found houses and shrimp hatcheries powered by solar panel provided by Grameen Shakti. Millions of rural homes in developing countries get electricity from solar cells. “The potential is enormous,” says Anil Caabral, an energy specialist for the World Bank, which has helped finance 500,000 residential solar systems from Argentina to Sri Lanka . It is true the wattage is low and price structure is still very high, but left with no other alternatives affluent people and business communities have gone for it.

Undeniably true, problems of power are not created in just one summer but are an accumulation of years of neglect and bad performance. If the government of the bygone days has failed to realise it, the government that be or the people or parties that are vying for power must realise that energy or power is the prime mover of a modern state and investors from home and abroad will be shying away as long as the state of our energy has not improved..

Md. Asadullah Khan is a former teacher of physics and Controller of Examinations, BUET.

Link: http://www.thedailystar.net/story.php?nid=33760

Can new govt re-energise economy?

Ifty Islam

As we digest the new cabinet appointments and their implications for future economic policy, it is worth reviewing one of the key economic commitments made in the AL manifesto namely ‘generating 5000 MW electricity by the next three years and 7000 MW by 2013′.

The strong commitment that the newly elected Awami League government has made to prioritising tackling Bangladesh’s energy crisis is clearly to be welcomed. However, translating these goals into reality will take bold and focused decision-making, persistence and a recognition that a failure to quickly resolve the power generation deficit will be unacceptable to an electorate that has clearly demonstrated its ability to articulate its desire for economic change. If there is one area where the new government should utilise its overwhelming parliamentary and mandate, it is in tackling politically difficult decisions in the energy sector early on.

Here is a six-point action plan:

Coal

The immediate policy priority should be the rapid passage of the National Coal Policy. The government in December 2005 published the first draft. Since then, the draft policy has undergone many revisions on the basis of discussions with various stakeholders and experts and still has not been finalised. Along with this, we need a decision on what terms the government feels is equitable for both the taxpayer and the local people in Asia Energy’s development of Phulbari. Developing the country’s coal reserves has environmental consequences that need to be mitigated. The people need fair and equitable compensation both financially and in terms of re-settlement and new employment. But there is almost no way we can generate 5000 MW in the next three years, or even five or six, without a quick decision on Phulbari, and indeed the development of the other coal fields. If the decision was taken next week to develop Phulbari and also simultaneously build a coal-fired power station there, we would not see any new power generation coming on tap for 3-4 years.

To facilitate a more rapid increased power generation capacity, the government can set up some small coal fired power plants and can import coal from India on a temporary basis before developing our own coal mines.

New Gas Exploration

The government needs to focus on new gas field exploration to fuel the existing gas based power plants. The recoverable proven remaining reserve of gas is around 8.1 TCF (trillion cubic feet), which will start depleting after 2012. The maritime boundary dispute with India and Myanmar is a major barrier to offshore gas exploration, and should be resolved as soon as possible. The government should declare the next 5 years’ plan of action for BAPEX. In the recent FBCCI economic roadmap report, it was suggested that the government set up at least 6 exploration wells every year, and should start the work of at least one exploration well in the first 100 days. If needed, energy bond or levies should be charged to raise funds.

Rental Power Plants

More Rental Power Plants (RPP) need to be installed to overcome the short-term power crisis. In RPP, project developers are allowed to install second hand engines, thus shortening the project implementation time, which is currently 120 days as set by the government. RPPs are usually costlier as the contract period for these projects is three years. The government needs to attract more local/ foreign investors to increase the competition in the tendering process, which will eventually reduce the tariff. Along with that, the government needs to closely supervise the implementation of the project to ensure timely commencement of power generation.

Realistic Energy Prices: The government also needs to recognise the need to move tariff prices paid to new power generation companies to more realistic market levels. In order to be self-propelling and to ensure sustainability of uninterrupted supply of power, investment in the sector must be commercially viable. The real cost of power is always cheaper and better than no power. The analogy for companies would be the need to focus on profit-maximisation over cost-minimisation. If we can expand production of exports and higher value products with more energy even at higher but more realistic prices, that is the right thing for the country to do rather than to have a power shortage due to commercially unattractive prices. The near 70 percent fall in oil prices from last year’s peak is an ideal opportunity for the government to normalise energy prices.

Reduce System Loss

Bangladesh should prioritise on reducing system loss in the power sector. From 1994 to 2005, Tk 189.30 billion was lost through distribution leakage and pilferage. A reduction of one percent system loss can save around 45 MW of power. Nothing less than complete transformation of the existing generation and distribution utilities into public limited companies under the provisions of Companies Act 1994 with the government and private sector participation can ensure appropriate technical and commercial management to eradicate the legacy of mismanagement, inefficiency, corruption and the resultant system loss.

Infrastructure Investment Promotion Agency

There seems to be a perennial myth in the energy and infrastructure debate within Bangladesh that there is no shortage of funds. A Deutsche bank report has suggested India needs $ 450 billion of infrastructure spending in the next 10 years. If Bangladesh’s GDP is 1/12 of India, this suggests we need $ 37.5 billion of investment or $3.75 billion per year. Bear in mind the largest syndicated loan deal so far is $44 million so this is a tall order. But on a positive note, the World Bank and ADB are likely to provide 80 percent long-term debt financing. In order to generate the equity commitments, we need a new infrastructure investment agency that will pro-actively market infrastructure opportunities to overseas investors and energy companies. The Bangladesh opportunities are compelling but we still need a dynamic and focused strategy to persuade global infrastructure funds to consider opportunities here. But such an agency should also encourage a wider range of local corporates to participate in infrastructure projects either through syndicated deals or even the development of specialised institutional funds.

In conclusion, while the progress in recent years on adding energy capacity has been disappointing, we should all be encouraged by, and supportive of, the new government’s renewed initiatives to tackle one of the major constraints on growth that the country faces. Infrastructure is the one area where AL’s overwhelming political mandate can lead to a real economic breakthrough. Let us translate this optimism into time bound policy actions.

Link: http://www.thedailystar.net/newDesign/news-details.php?nid=70432