A meeting between the Power Division and the Bangladesh Independent Power Producers Association (BIPPA) ended without any agreement. If the crisis is not resolved quickly, many power plants may shut down due to a shortage of fuel oil.
For several months, disputes have been ongoing between owners of private power plants and the Bangladesh Power Development Board (BPDB). A decision taken during the final period of the interim government has brought the two sides into direct confrontation. Because power plants failed to supply electricity according to demand, penalties worth several thousand crore taka in liquidated damages (LD) have been imposed. Entrepreneurs argue that they could not import fuel because they had not received their payments, which forced the power plants to remain shut down. Therefore, according to the contract rules, the LD penalties should not apply to them.
At a recent press conference, Imran Karim, former president of BIPPA, said that under the contract terms, if BPDB fails to pay bills on time, it loses the right to demand electricity. He stated that penalties were imposed during a period when power generation had already been limited. In a similar situation, the Chinese-owned Barishal Power Company was fined Tk 270 crore, but the penalty was later refunded. However, a different decision is being applied to local companies. He alleged that foreign companies are treated one way while local companies are treated differently, even though the contract terms are exactly the same. Bills for foreign companies are not kept unpaid for more than three to four months, whereas local companies have outstanding dues for eight to ten months, making it extremely difficult to keep their plants operating.
Outstanding payments to oil-based private power plants have reached about Tk 14,000 crore. The companies say they cannot import fuel without receiving their dues. Their existing fuel reserves are expected to run out by the first week of April, after which it will not be possible to keep the power plants operational.
In this situation, State Minister for Power, Energy and Mineral Resources Anindya Islam Amit held a meeting with BIPPA leaders for the first time on Tuesday (10 March). Many had hoped that the meeting would lead to a solution, but according to sources, no final decision was reached.
Sources said that after hearing the details of the issue, the state minister asked for time to resolve the problem. He assured local entrepreneurs that their interests would be protected and said that all problems should be resolved through discussion rather than through legal disputes.
During the meeting, BIPPA requested that at least Tk 1,500–2,000 crore be paid before the Eid holidays. Otherwise, they warned that power plants could shut down due to the inability to import fuel. They noted that importing fuel typically takes at least 40 days, so opening letters of credit (LCs) before Eid is essential.
BIPPA President David Hasanat said the state minister had asked for time to resolve the issue, but the situation for the companies is already very difficult. Banks are no longer willing to provide financing, he said, raising the question of how companies will import fuel under the current circumstances. He added that they had informed the state minister of the overall situation, and he had assured them that he would look into the matter.
BIPPA had also held a press conference a day earlier (9 March), where it suggested that if the government faces a financial shortage, it could issue bonds to the companies as a way to resolve the payment crisis.
