Delhi yet to settle power tariff issue even 5 months gone after Manmohan’s promise

Even about 5 months have elapsed after the visit of Indian Prime Minister Manmohan Singh when he assured of export of electricity to Bangladesh, Indian authorities are yet to settle issues of power tariff and plants from where power to be exported.

In such a situation, Bangladesh and Indian officials are likely to
hold meeting of the joint steering committee either at the end of
current month or in the first part of next month, Power Ministry
officials said.

Bangladesh signed a power transmission agreement with India in 2010
to import 250MW electricity to meet the shortage. Another memorandum
of understanding (MoU) was signed to build a 1320 MW coal-fired joint
venture power plant.

During the Indian Prime Minister’s Dhaka visit in September last,
agreements on power purchase and setting up of a coal-fired plant
were supposed to be signed with India. But finally it was not done
because of non-settlement of the tariff and the relevant issues.

The steering committee is the highest body to deal with the matters
related to cooperation in power sector. The power ministry
secretaries of the two countries are the heads of the steering body.
Under this body, a number of technical and working bodies are also
working on the particular issues and met on a number of occasions.
But the steering body met only once in a year.

The last meeting of the steering body was held in Dhaka in May last
and the next meeting was supposed to take place in New Delhi in
January or February in 2012. But Indian Power Ministry officials have
not yet informed about the meeting.

A loan of about US$ 100 million from the Asian Development Bank
remained stuck up for non-settlement of the power tariff with India.
The release of the fund depends on the signing of agreement with

India had initially proposed that the electricity tariff will be
fixed by Indian Central Electricity Regulatory Commission (CERC)
while the construction of the power transmission line will be
completed in December 2012.

But Bangladesh did not agree to accept CERC’s dominant role in fixing
the tariff. Instead, it wanted both sides to fix the tariff through
discussion and both sides should have similar authority.

During their last visit to New Delhi, Bangladesh officials raised the
issue and sought the Indian consent on Bangladesh stance. But the
Indian side failed to make clear their position on the matter. Until
the issues of power tariff and power plant for power supply are
settled, Bangladesh would not sign any agreement, said a top official
of the Power Ministry.

According to other sources, Bangladesh still does not know from which
power plant India will supply electricity. Even, it is not clear what
will be the transmission cost for the import.

Under the present Indian proposal, the CERC will determine from which
power plant the Indian government will supply the power to Bangladesh

Power Ministry officials said Bangladesh has repeatedly asked the
Indian side to let it know about the matter. But, so far there is no
response. They said the location and specification of power plant are
very important because the cost of electricity production and
transmission depend on these two matters.

In the proposed import of electricity, the officials said there is
some progress on the issue of transmission. Under a transmission
agreement with the Power Grid Company of Bangladesh (PGCB), a 107 km
400-kV power transmission line from Indian Baharampur to Bangladesh ’
s Bheramara are not being built along with two power stations at both

Of this line, an 80 km transmission line will be installed on the
Indian side while a 27 km line on Bangladesh side. The Power Grid
Corporation of India Limited (PGCIL) is implementing the 80-km
transmission line.

Similarly, the Power Grid Company of Bangladesh is implementing a
project to build the substation and the 27-km line at a cost of Tk
1047 crore. The substation alone needs Tk 850 crore.

But other than the transmission line nothing is clear to Bangladesh
about the costs of different matters, the officials said.

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