81% of power sector subsidy spent on capacity charges: Manna
Manna also alleged that the government is burdening the public with thousands of crores of taka to benefit the 'oligarchs'
A staggering 81% of government subsidies for the power sector go to capacity charges, Nagorik Oikya President Mahmudur Rahman Manna has claimed.
During a seminar on "Electricity: Journey from Light to Darkness" held at Dhaka Reporters Unity today (18 May), Manna said Tk1,06,786.50 crore has been paid in capacity charges over the past 15 years of the Awami League government.
"Some power plants, particularly rental plants, receive capacity charges that effectively raise the electricity purchase price above Tk50 per unit," he said.
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Manna further alleged that almost all of the subsidy in the power sector is going to rental electricity, benefiting government-connected oligarchs through inflated capacity charges. This practice is placing the burden of thousands of crores of taka on the shoulders of the general public.
Badiul Alam Majumdar, secretary of Sushashoner Jonno Nagorik (Shujan); BD Rahmatullah, former director general of Power Cell; Abu Sayeed Khan, advisory editor of Samakal; Mofakhkharul Islam Nawab, presidium member of Nagorik Oikya; and its joint general secretary Zahedur Rahman also spoke at the seminar.
Addressing the seminar, they highlighted the significant rise in electricity prices, with wholesale prices jumping 11 times and retail prices surging 13 times in the last 15 years. They argued that reducing power sector subsidies is necessary.
A recent increase in the dollar exchange rate of Tk7 is expected to inflate government subsidies by Tk5,000 crore, ultimately impacting consumers through potential price hikes. The government is reportedly considering raising electricity prices again this month, they added.
The seminar also addressed the challenge of fuel shortages due to limited foreign exchange reserves. This has forced the closure of many liquid fuel-based rental power plants.
However, critics pointed out that the government is still extending the terms of these very plants, raising concerns about the justification for capacity charges paid despite reduced operation.
They said the public is unfairly burdened with capacity charges disguised as subsidies. They alleged that the quick rental power plant system has enriched certain individuals, creating "overnight billionaires" with close government ties.
Before the Awami League came to power in 2009, some business groups were unknown, but now they rank among the top businessmen in Singapore and own multiple banks.
Nagorik Oikya leaders also criticised the government for granting indemnity to the power sector, allowing corruption, and exempting it from legal accountability by formulating special laws.
