Thursday, April 23, 2009

Time for govt to play more direct role in power generation

Editorial, NewAge, April 23, 2009

People may not have expected the power situation to improve overnight; however, they did not expect it to deteriorate so drastically in such a short period of time, either. While neither the Bangladesh Nationalist Party-led government nor the military-controlled interim regime did much to increase generation of electricity during their tenures, the rate of power outage and load shedding then was not as frequent as it is this summer. The continued dry spell and the scorching heat are decidedly not making things any easier for the government of the day. What is rather baffling is that within the span of just one year, the demand for electricity has risen so much that it is impossible to keep power outages at an acceptable level. The sporadic demonstrations and rampage by enraged citizens are bound to become more frequent if the current situation prevails.

On the other hand, there have been few indications that the plans to increase power generation are taking concrete shape satisfactorily. Whatever has been reported in the newspapers suggest to the contrary, although it remains an electoral pledge of the current government to add 5,000 megawatts of electricity by the end of its current term. It was apparent from the efforts of the two previous regimes that the government bids to float tenders for setting up power plants were mired in irregularities and even when those tender bids were cancelled and fresh tenders called, the process was riddled with complications. The current government will hopefully be able to rid those problems and go ahead with awarding tenders to private operators properly.

Power is increasingly becoming a necessity for the people to gradually move towards a higher standard of living. With reliable power supply, household expenditure on energy, which constitutes up to a fifth of rural household income, will be substantially reduced. Aside from the economic benefit increased electricity availability would allow a large number of the rural population with potentially more productive time. Electricity would also contribute positively to the quality of health services, not to mention water services in the cities. One of the main costs of agricultural production, diesel-run irrigation, is at least three times higher than power-run irrigation. And finally, industrial establishments will certainly gain substantially from uninterrupted power supply. The qualitative change that electricity supply could bring about may not be obvious in economic terms in the immediate future but it would certainly have substantial impact in later years.

This government should immediately engage itself and initiate power generation in the public sector without hindering the private players from operating. The public sector power generation could well target the excluded groups and supply them with electricity since electricity distribution is subsidised by the government any way. Moreover, this would allow the government a little more leverage as it very dependent on private power generation.

Wednesday, April 22, 2009

Hasina asked to fulfil her pledge against open-pit mining: Power crisis ‘artificially created’, ‘evil circle’ in power ministry

Staff Correspondent, NewAge, April 22, 2009

The National Committee to Protect Oil, Gas, Mineral Resources, Power and Port on Tuesday requested Prime Minister Sheikh Hasina to fulfil the commitment she had made as the leader of the opposition in 2006 to not allow open-pit mining in the country.

‘The former opposition leader and the incumbent prime minister, Sheikh Hasina, visited Phulbari in Dinajpur on September 4, five days after the Phulbari tragedy, and made a strong announcement that she would resist any move to operate any open-pit mine there as well as any other place in the country,’ said the committee’s convenor, Sheikh Md Shahidullah, at a discussion meeting in the National Press Club.

He said that Sheikh Hasina had also extended her full support to the agreement that the committee signed on behalf of people of Phulbari with the then BNP-led four-party government for cancelling the contract with Asia Energy for mining the Phulbari coal-field and for banning open-pit mining.

The then government signed the six-point Phulbari agreement with the committee, who represented the people of Phulbari, after three persons were killed on August 26, 2006 when law enforcers opened fire on people demonstrating against the Asia Energy’s proposed open-pit mine at Phulbari.

Hasina held a public meeting in the premises of the Phulbari Government College on September 4 to protest against the killing. Influential AL leader Matia Chowdhury, who is now the agriculture minister, Mostafizur Rahman Fizar, who is now the state-minister for forest and environment, and Jatiya Samajtantrik Dal’s president, Hasanul Haque Inu, were present at that meeting.

Shahidullah, at a the discussion meeting on Power Crisis, Evil Circle in Energy Ministry and Aggression of the Multi-National Companies, alleged that a minister, who is a relative of Hasina, had reportedly said that the open-pit mining was the only way to overcome the current energy crisis.

He said that energy shortage could be mitigated by underground mining of various coal-fields. ‘If we go for underground mining, we can extract 10-20 per cent of our coal reserve and with this amount we can meet our demand for 20 years. If we do open-pit mining, there will be environmental disaster and the extracted coal will have to be exported because of the high cost of extraction,’ he claimed.

The member-secretary of the committee, Professor Anu Mohammad, said that the current power and energy crisis has been ‘artificially created’ so that the country’s gas- and coal-fields can be handed over to foreign companies on the plea of exploration and production. ‘It is like blackmailing the nation to force the launching of projects beneficial to the foreign companies,’ he said.

The former director-general of the Power Cell, BD Rahmatullah, also claimed that the power crisis has been artificially created to push more controversial power projects like rental power plants.

He blamed the previous BNP-Jamaat government for failing to commission new power plants and observed that the present government had also failed to take any initiative to do so.

He also blamed the bureaucracy for the current crisis and observed that the secretariat should be ‘bombarded’ to root out ‘hooligans’.

Shahidullah said that certain quarters were blaming the national committee for the delay in formulating the coal policy and awarding of offshore gas blocks. ‘It is the government, which is delaying, not we. The coal policy is being delayed so that it can be formulated in a way that will favour the multinational companies,’ he observed.

‘We demand that the coal policy should be formulated immediately, keeping the peoples’ interest in mind. The government should also scrap the bidding process for offshore blocks that took place during the tenure of the interim government and go for fresh bidding after framing a new model production sharing contract by taking the people’s opinion,’ he said.

He claimed that the PM’s adviser, Tawfiq-e-Elahi Chowdhury, was the leader of the ‘evil circle’ in the power and energy ministry, and the new chairman of Petrobangla, Muktadir Ali, was a ‘member’ along with others, and demanded their removal.
 Justice Golam Rabbani, Professor Shamsul Alam, journalist Syed Abul Maksud and leftist leader Ruhin Hossain Prince were present on the occasion, along with others.

Tuesday, April 7, 2009

Govt has no mining deal with Asia Energy: PM’s adviser

Staff Correspondent, NewAge, April 6, 2009

The government has no mining agreement with Asia Energy for Phulbari coal field in Dinajpur, said adviser to the prime minister, Tawfiq-e-Elahi Chowdhury.

‘As far as I have learnt, there is no mining agreement with Asia Energy [for Phulbari coal field]. The issue of Asia Energy will be dealt with after the finalisation of the coal policy,’ Tawfiq told reporters on Thursday, replying to a query about what steps the new government would take on the Asia Energy issue.

Different rights and professional groups including the National Committee to Protect Oil Gas, Mineral Resources, Power and Port and the Bangladesh Economic Association have been demanding ouster of the controversial UK based company, which submitted a development scheme to the government in 2005 for operating an open pit mine at Phulbari.

Three persons were killed and many others were injured in August 2006 when law enforcers opened fire on protesters at Phulbari, who were protesting against the planned open-pit mine of the company saying that the environment of the area would be destroyed and they would lose their livelihoods and homes if the open-pit mine was operated.

Although the energy officials have claimed that the controversial UK-based company was only given the coal exploration licence and any decision on awarding the mining licence would depend on the government, Asia energy claimed that it was given the coal mining lease for ‘B area’ of the coal field in 2004.

The company has been waiting for a government decision on its coal field development plan, which was submitted in 2005 as the successive government failed to take any decision, although an expert committee, formed by the government, found in 2006 that the company’s agreement with the government was ‘illegal’ and that it would not be viable to operate the company’s planned open-pit mine.

The company’s chairman, Gary Lye on November 30, 2007, at a meeting with the members of the advisory committee to finalise the coal policy, claimed that after the mining lease was granted by the government, Asia Energy carried out a full scale exploratory drilling and conducted a feasibility study including the assessments of its impact on the environment and the society before submitting the development scheme.

‘There is the contract which contains an investment agreement and we have already invested a lot. The contract also covers the mining issue,’ he said.
 The company claimed that it had submitted an application for the mining licence for ‘B area’ which contains 1921 hectares of land, in November 15, 2000 and got the licence on April 1, 2004, when it was given 24 months of time to submit a development scheme after completing the feasibility study.

The company said it also held the exploration licence for G area with 1447 hectares and H area with 2112 hectares of land. It had applied for the mining licence for G and H areas along with I area with 10,371 hectares, T area 1775 hectares and U area with 286 hectares of land, the company said.

Members of the expert committee which evaluated Asia Energy’s development scheme, however, said that the company wanted around 6500 hectares of land in total for coal mining.

‘There is vagueness in the letter which the government gave to Asia Energy in 2004 to allow it to conduct the feasibility study. The letter basically says that it would be given mining licence if its development plan was accepted. So if its development scheme is not accepted, the government can say “no” to Asia Energy,’ said a member.

As per the committee report, Asia energy’s Phulbari coal field development scheme should not be approved on any account — legal, technological, financial, environmental and institutional.

Coal mining city to comprise 4 thanas of Dinajpur

Shamim Jahangir, The New Nation, April 7, 2009

The process for establishing a coal-mining city comprising four thanas in Dinajpur will start this month.

Initially the government will establish the coal-mining city with 10,000 people of Birampur, Fulbari, Parbatipur and Nababganj thanas on an experimental basis, Prime Minister Adviser for Power, Energy and Mineral Resources Dr Tawfiq-e-Elahi Chowdhury Birbikram told the New Nation yesterday.

Afterward, we will extend the area of the city in phases, he added.

He said they will sit with the planners and experts from LGED, BUET and BRAC soon and seek their opinion on the establishment of the mining city.

He said that the ministry has already prepared a draft map to establish the city.

"The government will ensure all the modern facilities in the coal mining city. For this, coal mining university, college, school, community hospital and different industrial units will be established at the city," according to him.

State Minister for Environment and Forests Advocate Mostafizur Rahman, who was elected MP from Dinajpur coalmine area, told the New Nation that Prime Minister Sheikh Hasina dreamt of establishing a coal mining city when she visited Dinajpur in 1998.

After formation new government in 2009, she again directed us to find out the possibility of establishing it in Dinajpur.

It was also the demand of the people of Fulbari and Parbatipur thanas, he informed.

He held out the assurance that the government will give due compensation to the families to be affected for building the coalmining city.

Meanwhile, the government constituted a 8-memeber committee to

determine compensation for the resettlement of 406 affected families of Barapukuria in Dinajpur coalmine project.

The committee has already identified five worst affected families of Kalupara and Moupukur villages and called for removing them to safer places as they are living in the coal mining area with great risk to their lives and properties. But the members of these five families have vehemently opposed their rehabilitation at other places unless they were given due compensation.

"We have already visited the coal mining areas several times and prepared our report on the basis of our talks with the affected families," a member of the committee said on the condition of anonymity.

He further said that they would recommend rehabilitation of more than 200 families of Kalupara and Moupukur villages first and then rest of the families of five other villages in coal mining area in phases.

In reply to a question, he said that the committee is yet to assess the size of compensation for the affected families.

The committee will recommend acquiring around 33.5 square kilometres of land at seven affected villages falling in coal mining area by resettling the affected people, he added.

An inter-ministerial meeting on March 3 constituted the eight-member committee to prepare a complete package programme for compensating people affected by land subsidence at the coal mine area and for future course of action including acquiring of land. The meeting also asked the committee to review the land acquiring procedures like Jamuna Bridge. The committee is headed by joint-secretary Ahmed Ullah of the Energy and Mineral Resources Ministry.

The government will acquire the land as early as possible for starting open pit mining in future, sources said.

Affected people at Barapukuria have become restive in recent times as huge land subsidence affected 300 acres of land and subsequently many houses at seven villages have developed cracks.

Following the agitation of Jhigagari villagers the coal production of Barapukuria remained suspended from February 25 to March 2.

More land subsidence might occur because of the underground mining. If people continue to live in the mining areas they might be at great risk because of subsidence, sources said.

The committee is likely to recommend a guideline for the government to appoint experts or surveyors to determine what amount of compensation of the people in the area need,

'Before assessing the compensation package, finding the actual number of people living in the area, determination of agricultural and residential land, number of houses, trees and the cost of crops are crucial. Besides, peoples' views should be taken on where they want to go and what they want to do after relocation,' sources noted.

The government has already constructed and renovated several building to resettle the affected families at West Camp in Dinajpur.

The Barapukuria coal field has a reserve of around 389 million tonnes and the authorities will extract 10 to 20 per cent coal from the underground mine in 30 years

Saturday, April 4, 2009

Bangladesh ministry moves for joint venture policy on gas, coal fields

Aminul Islam, NewAge, April 4, 2009

The power and energy ministry has taken a move to formulate a policy for the public-private joint venture to develop gas and coal fields on a ‘fast track’ basis.

‘The main aim of the policy will be to allow Petrobangla to form joint ventures with local private sector or foreign companies to develop gas and coal fields.

The gas and coal fields cannot be developed quickly at present because of the existing procurement rules,’ said a high official of the ministry.

Petrobangla prepared and placed a draft joint venture policy on Thursday as per the ministry’s directive at an inter-ministerial meeting, headed by the adviser to the prime minister Tawfiq-e-Elahi Chowdhury.

The draft said that the joint venture for energy sector was needed as the country was facing a huge energy crisis although it had five coal fields and potential for more gas reserves.

Petrobangla would be able to form joint ventures for any energy-related projects like exploration, production, transmission and supply of coal, gas and other hydrocarbons and the ministry would be able to approve projects worth up to $50 million.
 It also said a security-committee, headed by the chairman of Petrobangla or an additional secretary of the ministry, would be able to approve projects below $50 million.

The meeting, attended by representative of different ministries like the finance, planning, industries and commerce, Board of Investment, National Board of Revenue and Bangladesh Energy Regulatory Commission, however, asked Petrobangla to review the draft further.

‘The draft policy was sent back as it was similar to the Private Sector Infrastructure guideline, which was enacted in 2004 for tapping private sector investment in different projects.

The meeting felt that the energy sector joint venture policy would be more up to date and different,’ said an official.

Energy experts, however, said that such joint ventures could encourage more irregularities in the energy sector if the government failed to ensure competitive bidding in the process.

The past BNP-led BNP government signed a controversial joint venture agreement with the Canadian company Niko Resources for two gas fields in continuation of a move by the previous Awami League government, which declared three gas fields abandoned, despite having sufficient gas reserve to award the fields to Niko, said an expert.

‘It seems there was a move to sign more such joint venture agreements under the energy sector joint venture policy to award gas fields to foreign companies,’ he said.

Energy expert Professor Nurul Islam of BUET told New Age on Friday that there was no need for joint ventures to develop gas fields. ‘Joint ventures for gas fields will not give any benefit. For example, the joint venture for Feni gas field gives Bapex only 20 per cent share while 80 per cent share was being taken by Niko,’ he said.

He said a joint venture could be formed for the coal fields as per the draft coal policy. ‘A separate policy for joint venture for coal fields can be enacted but the joint venture partner for state-run companies for coal fields will have to be selected through competitive bidding,’ he said.
 Sources in Petrobangla said that Petrobangla and the energy ministry were also eager to formulate the policy to engage some dubious companies like the Luxon Global of South Korea in exploring and developing coal fields.

‘Petrobangla has already got a number of offers from companies from South Korea and Poland to form joint ventures to explore coal at Dighipara field.

The dubious Luxon has become more active since its Bangladesh agent was elected a member of parliament from the ruling party Awami League. It will be convenient for them to form such joint ventures if there is a policy,’ said a source.

A high official of energy ministry, however, said that the draft of the policy would be formulated in such a way so that no irregularities could take place. ‘The draft of the policy was sent back as we want that there would be some sort of authority which will look after the formation of joint ventures and see whether any irregularities are taking place,’ he said.

Friday, April 3, 2009

PM for decision on coal policy on priority basis

NewAge, April 3, 2009

The Awami League-led alliance government has decided to hold an open discussion on the draft coal policy with different stakeholders for finalising the policy on a priority basis.

‘The prime minister, Sheikh Hasina, has directed us to finalise the coal policy as we need alternative energy sources to produce electricity. We will soon hold an open discussion with different stakeholders to finalise it on an urgent basis,’ the prime minister’s adviser Tawfiq-e-Elahi Chowdhury told reporters after Hasina held a meeting with power and energy officials on Thursday.

The previous BNP-led government that first prepared a draft of the coal policy and then the interim government held half a dozen open meetings with stakeholders but could not finalise the draft because of controversy surrounding the mining method and fixation of royalty.

When asked why another meeting was needed with stakeholders when controversy was raging over the coal policy for the last three years, Tawfiq said, ‘Every government has its own policy and philosophy. Of course, we will consider the investment issues, local people’s concern and electricity generation while finalising the coal policy.’

Hasina, who is also in charge of the power and energy ministry, held her second meeting, which lasted three hours and a half, at the ministry to discuss about the current power situation and what steps could be taken to improve it.

The prime minister stressed the need for increasing gas and coal production for overcoming the power crisis.

Sources present at the meeting said that Hasina had asked power officials why there were power outages 10-12 times a day. Power officials said that power outages more frequent in some areas because of technical faults.

She dismissed power officials’ claims that there was only 15 per cent system loss in the power sector.

Power officials said that the electricity supply situation in the capital would worsen after May because of rise in the demand and sought the prime minister’s directive in shutting down steel and re-rolling mills which consumed huge amount of electricity during evening peak hours.

Hasina asked the authorities to go ahead with the plan. She also asked them to launch a campaign for reducing use of air-coolers during peak hours.

She asked officials to take steps so that the power projects that were in the pipeline – under construction, under tender process or planning – could be implemented as soon as possible.

Tawfiq said that the capacity of the power plants in the pipeline would be around 3,000MW. ‘The prime minister has directed the authorities to go for dual-fuel option in installing the new power plants like the 450MW Sirajganj independent power plant,’ he said.

Hasina also asked the authorities to start negotiations with the countries that had installed power plants like Ghorashal, Ashuganj and Khulna, to replace these old and inefficient plants with new plants.

She asked the power officials to explore whether smaller hydropower plants could be installed in rivers and haors across the country and in water streams in Sylhet and Chittagong.

The prime minister also directed the authorities to expand solar energy projects in urban areas and to explore whether irrigation pumps could be run by electricity generated from solar panels.

She also directed officials to explore whether electricity could be imported from India, Nepal, Bhutan and Myanmar under regional cooperation.

For exploring new gas, Hasina asked the gas authorities to engage a contractor to conduct 2D and 3D survey at the onshore gas fields of Bangladesh Petroleum Exploration and Production Company as Bapex would remain busy in the next three years with gas exploration.

Hasina also directed energy officials to discuss with the attorney general the issue of taking legal steps to have a High Court injunction on signing production sharing contract for onshore gas fields withdrawn.

Tawfiq said that they would take to the cabinet meeting a proposal for introduction of daylight saving system by advancing the clock by one hour to save power and gas during evening hours.