The Local Consultative Group (LCG), a platform of Bangladesh's development partners, in a letter to Prime Minister Khaleda Zia on September 26 expressed deep concern at the irregularities and sought a meeting with her to directly share their concerns.

"These concerns are causing major delays in the development of the sector and the expansion of power supply needed for the economy, jobs and investment. They also make it difficult for donor resources to support the power sector or the rural electrification effort," Christine Wallich, chair of the LCG, said in the letter.

The LCG, on behalf of the ambassadors, high commissioners and agency heads most active in this sector, urged the government to address the governance shortcomings in the power sector and take necessary steps to avert a potential crisis.

"Your actions would have a substantial impact on donor willingness to support projects in these fields...," the donors observed.

Copies of the letter have been sent to the finance minister, state minister for power, secretary to the Economic Relations Division and envoys of US, UK, Germany, Japan, Norway and the Netherlands, the country director of the ADB and members of the LCG.

Governance issues are taking a toll on the rural electrification programme and the management of both the Rural Electrification Board and Palli Bidyut Samity are 'under frequent political pressure' to construct rural electric lines on political considerations, violating its own agreed economic and financial policies for expanding rural lines, the LCG alleged.

"Allegations of irregularities in the Mymensingh III and planned Dhaka North Power Plants have raised further questions about governance within the rural power system, and within Rural Power Company.

"The LCG observes with dismay the lack of progress on the independent review of these irregularities despite the Honorable Prime Minister's consent to such an independent and comprehensive review given to German Foreign Minister Joschka Fischer during his recent visit to Bangladesh," the LCG further said in the letter to the prime minister.

"By their continued delaying tactics on this review, subordinate agencies are jeopardizing the sustainability of rural electrification effort," it observed.

"... I wish to share our grave concerns about recent developments in this sector which are damaging its current operations, future expansion as well as the possible extent of the cooperation of the donors. We do not exaggerate in saying that the power sector is nearing a crisis point," wrote Wallich, also the country director of the World Bank.

"Urgently-needed new generation plants are being delayed by a consistent pattern of questionable tendering and re-tendering by (the government). The ongoing Sirajganj retender is only the most recent example. Of the 5 plants under process of procurement by the government, only 4 power plants have been awarded. As a result, no generating capacity of significance has been brought on stream in this 2-year period.

"By the Power Ministry's own estimates, Bangladesh, an already very power scarce country, needs to bring 450 MW on stream each year, just to prevent current shortages from worsening. The economy, jobs and investment are being badly hurt by this apparent misgovernance in the public procurement process," Wallich continued.

She also said she agrees with the government in saying the power supply must maintain the pace needed to meet the demands of a growing economy. But the adverse effect of power being unavailable during the floods shows that the vital relationship between reliable power supply, growth and poverty reduction in Bangladesh must be kept in mind.