They stressed that the situation can be improved if there is political will, non-interference from outside and transparency in the sector.

The dialogue on 'Current Crisis in the Power Sector: Nature of the Problem and the Way Forward', was attended by leading power experts, economists, bureaucrats, parliamentarians, donors, businessmen and State Minister for Power Iqbal Hasan Mahmud.

Fund shortage, policy inadequacies or lack of coordination are only second to leadership crisis in the sector, the participants said at the dialogue organised by the Centre for Policy Dialogue (CPD).

Energy secretary during the previous Awami League (AL) rule Dr Towfiq e Elahi Chowdhury cited how non-interference of the AL government improved the power sector within a short period back in 1996-97. Before that time, power crisis was similar to that obtaining now.

"The government was serious. There was no politicisation of the sector. Sheikh Hasina (the then prime minister) deeply focussed on the problem. She never interfered with us. This gave confidence to people who were trying to solve the power crisis" We worked as a team with Petrobangla, Power Development Board (PDB) and the ministry," he said at the dialogue chaired by former finance minister M Saiduzzaman.

"We went for tenders after making sure that there will be no re-tendering," he said.

"But now there is no coherent leadership. There is a confusing signal in the market. The confidence and team spirit (of power sector staffs) are lacking, and structural problems have become deeper," he pointed out.

Former chairman of the PDB Shamsul Islam presented the keynote paper.

CPD Executive Director Dr Debapriya Bhattacharya mentioned a CPD 2004 study saying, "The study found that the economy incurred a loss of Tk 6,850 crore in 2004 due to power outage. This is equal to 2 percent of the GDP. The major affected sector is the commercial and industrial sector. This scenario is worst now."

Leading multinational executives feel that Bangladesh power situation is the worst in the world, he added.

President of Bangladesh Chamber of Industries (BCI) AK Azad said why didn't the government approve the 450 MW Sirajganj bid by Summit? "Was it driven by any political bias?"

He mentioned the bids for small power schemes, saying, "We hear these schemes are being given to ministers and MPs. Is this how the sector will improve?"

Power Secretary MM Nasiruddin asked the forum if they were sacrificing all procurement in the name of transparency.

"Once we select a bidder in a tender, the other bidder files complaint to us or the World Bank. Then we come up explaining. If we then switch to another bidder, there will be complaint again. What are we going to do? How best can we ensure transparency?"

World Bank Country Director Christine I Wallich said non-transparency in procurement cannot be defended as transparency ensures value of money.

Expressing her shock at the remarks of the power secretary, she said it is inappropriate to weigh transparency versus procurement.

"I did not like what I heard. Transparency is not the goal, it's the means to ensure value of money," she said.

Turning to concern expressed by the power secretary that independent power projects (IPPs) are draining out foreign exchange, Wallich said, "It is naive to think that payment for power projects can be made avoiding foreign exchange. Whoever buys a plant from whoever supplier, you will need to pay in foreign exchange. It is not the fault of the IPPs."

She observed that as donor, the WB is committed to helping Bangladesh improve its power sector. But to handle the crisis, the government must ensure better procurement and take some effective measures.

"There is a simple solution which is well within the grasp of the donors or other financiers. But simple things turn complex. We need to find a long term and a short term solution," she said.

In the short term covering 12 to 18 months, the government may go for 100 MW small power plants after fixing how the payment will be made. The government may also go for one or two barge-mounted plants in the short term, she said. "If there is will and leadership, it is not difficult to achieve this."

The WB will provide support for small plant schemes. "But the government must award the large power projects of Sirajganj, Meghnaghat 2 and 3 as per the guidelines of the Public Procurement Regulation 2003, which is set to become a law soon," wallich noted.

There is a question about leadership problem being responsible for the current scenario in the power sector, she said.

"Do we have financial problems in the power sector? No. The donors are willing to finance. Sector coordination is a problem but it is not the number 1 problem. Policy is good but implementation is in question. Is there any problem induced by the PPR? No," she said.

Former energy minister Nuruddin Khan, Shakhawat Hossain Bakul MP, former PDB chairman Nuruddin Kamal Mahmud, President of Energy Association of Bangladesh Moazzem Hossain, Former president of Foreign Chamber of Commerce and Industry (FICCI) AK M Shamsuddin, PDB Chairman Akhter Hossain, Zafrul Hasan, Prof Shamsul Alam, Aziz Khan of Summit Group and Prof Dil Afroz of BUET also took part in the dialogue.

Nuruddin Khan stressed decentralisation of power generation system, consideration of coal-based power and resumption of Rooppur power plant to increase power generation.

Nuruddin Kamal opposed the view that there is no power crisis in the country, rather it is a power shortfall. "If a shortfall of 1100-1200 MW is not a crisis, then what is a crisis? " he asked.

The present crisis is due to lack of foresight among the policy makers, he thought.

He stressed political will to solve the crisis.

The former PDB chairman suggested setting up power plants of 100 MW capacity each at six places to meet the immediate need.

Zafrul Hasan said the present situation is the result of frequent policy changes.

Future Plan
State Minister for Power Iqbal Hasan Mahmud claimed the government has the political will to improve the situation but there are some lapses which are impeding desired progress.

Explaining the government's plan to increase power generation, he said at least 300-500 MW power would be added to the national grid by implementing short term measures.

He also emphasised rehabilitation of existing power plants to increase generation.

In the next six months, the demand for power would be around 4300-4500 MW while the generation would reach 3,700 MW, according to his prediction. "Still there would be a shortage of around 700-800 MW," he said.

The ministry needs at least Tk 4,000 crore annual allocation from the budget to meet the demand for power, the state minister said. "The current allocation is not enough for this".

The tariff in power sector is not cost effective because the PDB sells power to various distribution agencies at a price lower than it gives for procurement from the generators, he mentioned.

Around Tk 2,000 crore was lost after the formation of Desa on the donors' prescription. Donors often commit funds but delay disbursement.