A government proposal to provide special privileges for private investors wanting to get involved in the power sector has not been well received by the business sector.
The new government proposal was explained at a discussion on Saturday involving finance minister AMA Muhith, he prime minister’s energy adviser, Tawfiq-e-Elahi Chowdhury, other senior government officials and the business community..
In the plan, power sector entrepreneurs would be allowed duty free imports of equipment, spare parts and furnace fuel and all the benefits enjoyed by Captive Power Plants (CPP) and Independent Power Producers (IPP), the finance minister told the discussion.
“These decisions will be implemented very soon,” said Muhith.
He added that license fees of CPPs, which is Tk 5 lakh per annum, will be withdrawn.
CPPs were initiated in 1996, mainly for industries, so that they can generate their own power. Later in 2007, a policy was formulated to procure surplus power from these plants.
The business community, however, was skeptical as neither the adviser nor the minister guaranteed that the government would purchase power from them.
“It’s hard to make such a huge investment without any assurance of government procurement,” FBCCI president AK Azad said at the meeting.
Other noted members of the business community echoed his views at the meeting.
Manzur Ahmed, one of the directors of the FBCCI, stressed that there should be a “clear guideline” for the new scheme.
This view was supported by ommerce minister Faruk Khan, who participated as a representative of the business community.
“The government needs to spell out an indicative price, without which it would be hard for businesses to make a decision,” said Khan, whose younger brother is the head of Summit Group, a major player in the power sector.
He also stressed on guaranteed purchase by the government and “clear” guidelines.
While responding to the issue of guidelines, the energy adviser, Tawfiq-e-Elahi Chowdhury, said, “What more guideline is needed? It’s time to make investment decisions.”
He urged business to give proposals as he believed it was an opportunity for “good business”.
Meanwhile, the ‘red-tape’ issue was highlighted by the entrepreneurs.
“I want to build a 100MW power plant, but the government is not allowing me to do so,” said Samson H Chowdhry, head of Square Group.
According to the Square chairman, entrepreneurs would not be interested unless these procedures are made simpler.
The opportunity to produce gas-based power was raised by the businessmen.
“The government may consider supplying gas in future when the situation gets back to normal,” said Azam J Chowdhury of East Coast Group, referring to Petrobangla chairman’s assurance that they would be able to add 1000 MMCFD (1 billion cubic feet or units) of gas within two years to daily gas generation.
Recent media reports quoted, Petrobangla chief Hossain Mansur, saying that the country’s main problem was not availability of gas, but poor transmission.
“Once the transmission glitches are addressed, we will be able to add 1000 units of gas by 2012 and another 1500 by 2016,” said Mansur.
“Assurance of gas is difficult as it depends on availability,” said the finance minister apparently contradicting the Petrobangla chief.
Muhith asked the businessmen to come up with proposals for power plants and promised further considerations.
“If possible, we will provide more facilities according to your proposals.”
According to the finance minister, power and transportation are the major obstacles for the country’s growth.
“Without these two problems, growth would have been at 10 percent rather than the current six.”
The meeting was chaired by power state minister Enamul Haque.