How is the present power supply situation in the country? Of course, it is far better now than any time in the recent past. The improvement, however, has been gradual and quite expensive. The improvement has also been made in somewhat non-transparent manner. However, the high costs as usual have been shifted on to the power subscribers in particular and taxpayers in general.
Despite substantial improvement in power generation, there exists a demand-supply gap. But that is not that large as witnessed before. The power generation capacity now hovers around 15,000 megawatt (MW) as against 5,000 MW in 2009. There is no denying that the actual generation of power remains below the full capacity for technical and other reasons. Yet the benefits of substantial increase in power generation are not reaching the consumers to the maximum possible extent for problems with transmission and distribution and also with management.
The Metropolitan Chamber of commerce and Industry (MCCI), Dhaka, in its latest economic update referred to the disruption caused to industrial production due to frequent power outages. The Chamber noted with concern that the industries were suffering despite improvement in power generation situation in recent years.
The government does also admit that it has been facing serious problems in the matters of power transmission and distribution. Though a good number of projects have been initiated, it might take some time to improve the situation. The authorities concerned, apparently, were more concerned about meeting the problem of power shortage. They had concentrated all efforts to beef up availability of power and did not pay due attention to improvement of transmission and distribution network. The power subscribers are now subjected to frequent power outages, in many cases, only because of the faults in transmission and distribution.
However, the country's power supply situation remains vulnerable to non-reliable natural gas supply. The generation very often faces disruption because of the gas supply shortage. The gas-based power plants, particularly those belonging to the public sector, are forced to go out of operation as gas is diverted to fertilizer factories. In fact gas-based power plants and fertilizer factories have become very staunch rivals as far as gas consumption is concerned.
Undeniably, the gas supply situation has seen remarkable improvement in recent years, mainly due to the involvement of rental and quick-rental power plants. These plants, however, have generated enough controversies because of an opaque process followed in granting permission to them. The prices offered to these plants against the purchase of electricity, it is alleged, are also very high. There are other allegations, including financial irregularities, involving these plants.
The fact is that the power tariffs have been revised upward at least half a dozen times since 2009. The power subscribers do not endorse the increase in power tariffs. Yet they are happy that situation has improved.
The increase in generation of power over the last few years is failing to leave the desired impact on the country's industrial sector. New industries are required to wait for months to get power connections. At the moment, several thousand applications for getting power connections to mills and factories are gathering dust in the offices of power distribution companies.
The 'Doing Business Report-2017' of the World Bank (WB), highlights a very serious situation with regards to power supply to industries in Bangladesh. Industries here have to wait for the longest period among the countries in Asia, an average 404 days, to get power connection. In India an application for power connection from an industry is disposed of within 47 days and in South Korea in only 18 days.
Thousands of industries across the country are not being able to start production for lack of power or gas connections. The possibility of gas connections has become uncertain, but power is supposed to be made available within a reasonable period of time. But, unfortunately, that is not happening.
The management at the power distribution companies remains a problem. Anyone seeking power connection to his/her residence or commercial or industrial establishment is required to submit a lot of documents, including the construction plans, duly approved by the relevant government agencies. It takes even a couple of years' time to get the connection after submitting all those. But the unauthorized roadside shops and city slums do not have to submit anything for getting power connections. There are people to manage on their behalf.
The problems that industries encounter in getting power connections are otherwise administrative in nature. The relevant authorities do very often cite technical problems for the delay in providing power connections to new industrial units. In reality, the problem lies somewhere else. Thus, one major reason for poor investment in the economy is the problem that entrepreneurs face while securing new power connections.
The government has to streamline the power distribution situation, keeping an eye on meeting the demand for power from industrial units, old and new. Getting new investments in the real sectors of the economy would remain impossible unless the problems of power and gas supply are resolved.