Interview

“Not Emotion, Decide to Extract Coal From Economic Perspective”

Jashim Uddin

FBCCI Vice President Jashim Uddin thinks that the government, not from emotional or political consideration, but from economic perspective should take a decision right now to produce domestic coal. At the same time, he thinks, both offshore and onshore exploration should be carried out for discoveries of new gas.

“But, we don’t have that kind of huge companies who can make the required investment for the entire energy sector. So, there is no alternative to FDI in energy,” said the Vice President of the country’s apex business body, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).

In an interview with the Energy & Power, Jashim Uddin, also the Vice Chairman of leading business group Bengal Group of Industries and National Television Limited (RTV), talks on different aspects of the energy sector. EP Editor Mollah Amzad Hossain took the interview. Following are the excerpts:

EP: How do you consider the present energy crisis in the country? As a business leader what’s your suggestion to come out?

JU: Energy is a longstanding problem for us. Although the present government took different crisis identifying the problem as a major one, we the businesspeople are not getting the benefit. The government says that electricity generation rose by 3,200-3,300 MW. But, at the same time our sufferings also increased. Earlier the government had said that every Sunday will out of electricity for six hours. It was ok. But, now it’s being said that a whole day will be out of electricity. It’s not a good sign for the businessmen and entrepreneurs.

You know recently it has been informed on behalf of the government that there will be no electricity supply to the industries from 6pm to 6am. It’s not possible practically. There are many industries where works go on for three shifts. Also, there is no scheduled shift from 6pm to 6am. No industry has 12 working hours. So, if electricity supply remains suspended for 12 hours, a full shift of 8-hour and 4-hour of another shift have to be suspended. It’s totally impractical. If the government can ensure uninterrupted electricity supply, we’re ready to buy with Tk 2.0 additional charge. The reality is that the cost of electricity is increasing, but we’re not getting electricity. So, the rise of electricity generation is only on papers, there’s no practical impact. Still we’re experiencing load  shedding in every alternative hour.

So, what’s the solution?

The first and foremost thing is increasing pressure of gas. There are many industries who wouldn’t want electricity connection if there is assurance of gas supply with standard pressure. And the under-construction industries are taking time due to uncertainty of energy supply. We had supported the bid to overcome the energy crisis, giving highest priority to power and energy crises. Now, we see that there is doubt that whether mid and long-term projects will be implemented. As a result, we’ve to bear the quick rentals for long. It’s not a positive sign at all. If we fail in planning and implementing in the energy sector we’ll lag behind in the world market.

EP: The government had set up some plants on emergency basis to meet the power crisis. But, the full capacity is not being utilized due to high price of fuel oils.

JU: The government had concentrated on short, medium and long-term plans. The business community had welcomed the government initiative, we also extended our supports and cooperation. Rental and quick rentals have been carried out, but we fell in deep crisis instead of coming out of it. I’m doubtful about the government claim on rise of electricity generation. The quick rentals couldn’t be run with full capacity due to oil crisis and high price of oil. Here I want to mention one thing. The quick rentals are of furnace oil-based. In one side, we are not being able to import oil due to lack in fund, and on the other we couldn’t improve our transport and reserve system. We lack in planning and if there’s a proper plan we lack in implementation.

Again, I would like to mention one thing. The government claim that oil price increased by three times is not true. So, the oil-based plants have to be in operation. In the meantime, highest priority have to be given on implementation of mid and long-term projects. Otherwise, the power crisis will worsen, which will jeopardize the economy. You see, there’s crisis in setting up base load power plants. So, the next budget should cut the unnecessary expenditure and make enough allocation for those projects. Otherwise, the employment will see a total closure.

EP: The government has a plan for special price for industries which is Tk 16 per unit. How do you look into the plan for supplying uninterrupted electricity to the industries under a special arrangement with a special price?

JU: Cost of per unit at Tk 16 is too high for use. But, I think many entrepreneurs will not hesitate to get electricity if the price is Tk 13. Many industries are run by CNG or diesel as backup. The PDB should supply electricity at a price which doesn’t bring loss for them. But, they shouldn’t go for profit also. The government institutions are service-oriented, not aimed at profit making.

EP: New gas connection remained suspended for a long. What’s the remedy?

JU: Many industries took bank loan after getting assurance to get electricity and gas connections. Now they are in crisis after importing the capital machinery. Some of the industries also became defaulters. The main reason is not getting gas connection. We talked to the Finance Ministry and the banks so that these kind of industries are not included in the defaulters list. Our recommendation is waiving their interest until they get gas connection.

This is temporary solution. They have to continue operation of the industries. But, the government is not taking any practical step. We are not being able to rise production against the demand. It’s making our economy import-oriented, cost of products is rising. At the same time, local industries are facing unequal competition. We hope that new gas connection will be given soon.

EP: You know that the gas-based power plants in the public sector is only 23 percent efficient. As a result, we are getting 4,000-4,200 MW electricity from 800-850 MMCFD gas. Experts think this quantity of gas should produce double electricity. How do you look into the inefficiency?

JU: This wastage is not acceptable where there is huge gas crisis. So, we shouldn’t only spend money only for new plants, we should also make investment to make the old plants efficient. For this we can go for IPP or FDI.

At the same time, we should go for far sighted planning. This is the high time to take decision on coal-based power plants. The government should also prioritize the sector for utilization of gas.

EP: The government is working for a load shedding-free Bangladesh by the year 2013. Are you optimistic?

JU: When the vision came, we thought that the government has proper plan and guidelines. But, now it’s a mission impossible. When we are experiencing load shedding for 10-12 hours a day after increasing generation by 3,200 MW, it’s not possible to ensure a load shedding-free Bangladesh by 2013.

However, it’s possible by 2015-16 if the medium and long-term plans are implemented.

EP: Even the Finance Minister admits that an energy famine is going on. So, many think that coal is an option. But, even after three years of the government there is no practical move. What’s your opinion?

JU: We’re talking much emotionally. We’re not being able to produce our own coal for political reason. If you see other parts of the world, you’ll find coal production was not suspended anywhere in the world due to opposition from the environmentalists. We should take pragmatic decision. No way imported coal can be alternative to domestic coal. And if we go for imported coal there might be similar situation as it’s now for imported oil.

EP: Do you have any plan to convince the government to take a decision on local coal?

JU: There is no alternative to electricity for economic development. For this we’ve to increase gas production and produce coal. And the government has to ensure it. We’ve been telling the government this for long. The government should overcome the emotion and take a decision based on the economic consideration.

EP: The Phulbari was ready and the company assigned for its development said that they can start production within 36 months of the final approval. Also, setting up a coal-based plant requires 36 months time. Do you think that the government should approve the project?

JU: For Phulbari, there is no obstruction other than political opposition. I think that the government should come out and take a decision on Phulbari. At the same time works have to be started for a mine-mouth power plant. I think if the production from Phulbari is viable on socio-economic and environmental aspects, the government should take a decision. It’s not that Bangladesh is the only country which will go for open pit mining. Why not we?

EP: A section of civil society is also opposed to FDI in oil-gas exploration. Even they are opposed to deepwater exploration by the world famous companies.  What do you think?

JU: Still Bangladesh lacks in industrial groups who can put billions of dollars for oil and gas exploration. So, we’ve no alternative to foreign investment in the sector. We’ve to look into our demand. We’ve no way to go forward without FDI. However, policy can be developed for FDI. The civil society can recommendation for the policy development. But, there is no scope to stand against the FDI.