Signing of IGA with Russia on N-power plants today

The government will sign an inter-governmental agreement (IGA) with Russia today (Wednesday) for construction of two nuclear power plants with a capacity of 1,000 megawatts (mw) each at Rooppur in Pabna.

"All is now set for signing the IGA with Russia in Dhaka to construct the country's first nuclear power plant," State Minister for Science and Information & Communication Technology Yeafesh Osman told the FE Tuesday.

Under the proposed IGA, Bangladesh will initially construct one 1,000 mw nuclear power plant with Russian assistance, said Mr. Osman.

There will also be provision for building another 1,000 mw nuclear power plant under the IGA, he said.

Director General of Russian State Atomic Energy Corporation (Rosatom) Sergey Kirienko will sign the IGA on behalf of Russia, while Yeafesh Osman will sign the deal for Bangladesh.

Prime Minister Sheikh Hasina will attend the IGA signing ceremony, to be held at her office in the morning.

"We are going to sign the IGA with Russia to move forward as per plan building the nuclear power plants," the minister said.

The work on installation of the first plant will begin in 2012 as per plan, he added.

Construction of the nuclear power plants will help ensure availability of electricity at affordable cost.

The government has planned to build the Rooppur nuclear power plant as part of its mega plan to generate 20,000 mw of electricity by 2021, said the state minister.

Bangladesh's overall electricity generation is now hovering around 5,000 mw against the demand for over 6,500 mw.

"The government wants to complete construction of at least one 1,000 mw nuclear power plant by 2018," Bangladesh Atomic Energy Commission Chairman ASM Firoz said.

It might cost around US$ 1.5-$2.0 billion to build the power plant, he said.

Bangladesh has planned to build the nuclear power plants utilising the latest available technology ensuring safety and security as the topmost priority, he said.

Earlier on February 24 last, Bangladesh and Russia initiated an agreement to install the nuclear power plant at Rooppur in Pabna, some 200 kilometers off Dhaka city.

Bangladesh also signed a five-year framework agreement with Russia in May 2010 followed by a memorandum of understanding (MoU) in 2009 for building the Rooppur nuclear power plant.

Local scientists also visited Russia several times and saw nuclear power plants to gather ideas about those.

Under the already agreed negotiation, Rosatom will supply necessary fuel for the reactors during its life-term and take back spent fuel.

Russia will also manage nuclear waste and help decommissioning of the nuclear power plant in future, under the deal.

Science and ICT Ministry of Bangladesh will act as the Competent Authority of the government, while BAEC will work as the customer of the proposed nuclear power plant project.

For Russia, Rosatom will act as the Competent Authority to implement the project.

Bangladesh and Russia have also agreed to set up a joint coordinating committee.

The International Atomic Energy Agency (IAEA) allowed Bangladesh to install nuclear power plants in 2007.

Country's unprecedented electricity supply crunch has prompted Bangladesh to undertake installation of its first nuclear power plant reviving around half-a-century old Rooppur nuclear power plant project.

The plan to construct the Rooppur nuclear power plant project was initiated by erstwhile Pakistan government in 1961.

Some 105.30 hectares of land were subsequently acquired for the project site and 12.15 hectares for the residential colony.

The then executive committee of the National Economic Council also had approved the project having three different capacities - 70 MW in 1963, 140 MW in 1966, and 200 MW in 1969.

But after the emergence of Bangladesh in 1971 there has been no headway in setting up of nuclear of power plant at Rooppur until the previous caretaker government moved afresh in 2007.

Source: thefinancialexpress-bd.com

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Rental power plants -- more than a zero-sum game

Shamsul Huq Zahid

In Bangla, there is a saying 'garaj baro balai' (necessity knows no law). The ongoing power crisis of unmanageable proportion has again proved it to be right, at least, in the case of the government's hasty actions concerning the liquid fuel-guzzling rental power plants.

The move to facilitate early commissioning of a good number of rental and 'quick' rental power plants in the private sector with the objective of meeting a large power deficit has given rise to lots of troubles, financial and otherwise, that the government, possibly, failed to foresee in their true perspective.

The power shortage has been taking a heavy toll on the economy. And the short-term and handy means chosen to offset, at least, partially that loss, in turn, are making budgetary management on the part of the government rather difficult.

The rental power plants together have already emerged as a serious pain in the government's neck. For running those plants, it is left with no option other than spending a substantial amount from its reserve, which has again come under strain of late because of less-than- expected inflow of foreign assistance and remittance income, on the import of additional quantity of diesel and furnace oil.

The foreign exchange expenditure apart, what should worry the government more is the subsidy that it would have to provide on account of the supply of fuel to the rental power plants and the gross mismatch between power procurement and selling tariffs.

There are confusions about the subsidy estimates since varying disclosures are made from to time by men in-charge of the ministry and agencies concerned. However, according to the latest estimates, if selling tariffs remains unchanged both in the case of petroleum products and power, the government would have to provide subsidies worth Tk. 230 billion -- Tk. 140 billion on oil marketing by the Bangladesh Petroleum Corporation (BPC) and Tk. 90 billion on power purchase, mainly from rental power plants, by the Power Development Board (PDB) in the current fiscal.

If the 'subsidy' estimates are right, the government will be in a real soup in meeting those, particularly when the allocation against all types of subsidies in the national budget for this fiscal is little over Tk. 90 billion. In such a situation, the government will take recourse to what most governments do; it would borrow from banks in excess of the amount projected in the budget, thus, adding more fuel to an already high inflationary pressure (point-to-point inflation, according to the Bangladesh Bureau of Statistics, was 12 per cent in last September).

There are also other concerns. A good number of rental power plants, according to a recent report in a Bengali daily, are unlikely to be commissioned on schedule because of the fuel supply-related problems. The failure on the part of the Bangladesh Railway and the Bangladesh Inland Water Transport Authority to develop necessary infrastructures to carry fuel to at least seven rental and quick rental power plants has made the commissioning of these power plants, having 450 megawatt (MW) generation capacity, uncertain. Poor navigability, low clearance of bridges over some rivers and insufficient rail track and tank wagons are responsible for the delay in fuel supply.

But the government may have to count a cost if these power plants fail to start producing power according to their pre-set schedules. And the conditions set in power purchase agreements that the PDB signed with rental power plants would come into play. Since the government wanted expeditious execution of rental power plants, it included a provision of imposing fines for delayed implementation of rental power plants. The provision is applicable to both the power plants and the government, depending on the nature of the causes.

The pertinent question that one may like to ask: Instead of going for rental power plant what else the government could do to narrow the power deficit within the shortest possible time?

There is no denying that rental plants are quick-fixes yet expensive solutions to power problem. But what is the use of opting for a solution that cannot deliver results in time for problems that the decision-makers fail to see beforehand? It is expected that the authorities concerned while allowing installation of a power plant at any specific site would take all relevant issues, including the facility available for transportation of fuel to it, into cognizance.

More importantly, no matter what the government is claiming about generation of additional power during its nearly three-year rule, the fact remains that people are still troubled by frequent load-shedding. The government may have added 1000-1200 MW or more to the national grid since its coming to power but, in the real sense, it has been more of a zero-sum game since the total generation by public sector power plants, in the meanwhile, has declined due to gas supply shortage or technical glitches.

zahidmar10@gmail.com

Source: thefinancialexpress-bd.com

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