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.