THE interim government, which assumed office on August 8, 2024 after the fall of the Awami League regime three days earlier, reckoned with the corruption that built had up on unsolicited rental and quick rental power plants initiated by the Awami League when it assumed office in 2009. The Awami League, which had been in office for a decade and a half in an authoritarian manner, allowed the installation of such power plants, riding on an indemnity law to keep actors and their actions in the power and energy sector above the customary law, as a means to channel public money into private pockets through capacity charges. The capacity charge is the money that the Power Development Board pays power-sector investors even when the plants do not produce electricity, with an aim to cover the loans that the plants receive, along with interest, salaries of the employees and returns on equity. More power plants started being installed, taking the power overcapacity to about 50 per cent, whereas the maximum acceptable power overcapacity threshold is 25 per cent. Even with an increased generation capacity, power woes have not gone away as the government could not create the demand for so much power and could not buy gas or coal to run the plants.
Whilst the capacity charge, more so on an excessive overcapacity, continued to bleed both the power sector and the economy, the situation added to the government’s subsidy on power, most of which is spent on capacity charge payments. The capacity charge in the form of subsidy has now averaged about Tk 30 billion a month for the past 30 months, which include the 17 months of the interim government. Finance ministry officials say that the monthly power subsidy was less than Tk 10 billion in 2021–22. The Finance Division provided about Tk 240 billion to the Power Development Board for the payment of bills in arrears to private power suppliers from the overall allocation of power subsidy at Tk 370 billion for the ongoing financial year. The interim government on November 28, 2024 repealed the Awami League-era Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 — first extended by two years in 2012, then by four years in 2014, then again by three years in 2018 and finally by five years in 2021 — creating hopes that the government would rethink the agreements, or at least renegotiate them, to end the menace in the energy supply.
The indemnity legislation no longer exists, but the corrupt structure of the power sector centring on capacity charge continues, worryingly, to bleed the power sector and the economy. Whilst the interim government has not done what was imperative for it, it will remain imperative for the next government that would assume office after the February 12 general elections.
