Dhaka, Feb 28 (UNB) – The government’s top policy makers on power have been briefed about the outcome of meeting the state-owned Bangladesh Power Development Board has recently held with a visiting team of Adani Group to discuss the coal pricing issue under its power purchase deal with the Indian conglomerate.
According to official sources on Tuesday, the officials of the BPDB briefed Prime Minister's Energy Advisor Tawfiq-e-Elahi Chowdhury and other top policymakers about the outcomes of the meeting with Adani.
“BPDB chairman Mahbubur Rahman and some top officials went to the office of the advisor at the PMO in the morning and stayed there until 4 pm on Tuesday”, a source said.
However, none of the officials of the BPDB was willing to share any detail on the issue.
Tawfiq-e-Elahi also could not be reached over mobile phone for his comment.
A 5-member team from the Adani Group came to Dhaka on Thursday last and held a meeting with the BPDB top officials to resolve the issues on "coal pricing mechanism of the power purchase agreement (PPA)”.
A chief executive and a chief procurement officer of Adani were among the 5-member delegation while one official from Adani's Dhaka office also joined the meeting that lasted more than an hour, said the source without mentioning their names.
A number of BPDB officials including the member (company affairs) and the member (finance) were present at the meeting, it said.
The issues discussed at the meeting were kept secret citing sensitivity on both sides.
Bangladesh sources said both the sides heard each other and presented their respective points.
"But both sides expressed interest to continue discussion,” said the sources, adding that Adani's representative informed them that they would communicate BPDB's stance on the coal pricing mechanism of the PPA to their top management and they will sit in more follow-up meetings.
"Adani officials are convinced with the BPDB's points on the issue,” said the official preferring anonymity.
"We're hopeful that Adani will finally accept Bangladesh's request for revising the PPA to set a new coal pricing mechanism", he said.
Following the meeting, the Adani team also met the BPDB chairman and Power Secretary Habibur Rahman separately.
BPDB officials said now the top policymakers of the government will take the final decision on the matter of "amending/adjusting coal pricing mechanism of the PPA".
They also said that they are hopeful of receiving electricity from Adani's 1600 MW Godda Coal-fired Power plant in Jharkhand state from anytime in March.
The Bangladesh government has sought a revision to the power purchase agreement (PPA) it had signed with Adani Power Ltd for importing electricity from its thermal power plant in Jharkhand, India in 2017.
The BPDB sent a letter to the Adani Group following a request it received in relation to opening LCs (in India) to import the coal that will be used to fire the 1,600 MW plant in Jharkhand,” a highly-placed official of BPDB told UNB, in return for anonymity to discuss the sensitive matter.
Since practically all the power generated by the plant located in the Godda district of Jharkhand state will be exported to Bangladesh for 25 years, Adani Power requires a demand note from BPDB that it can present to Indian authorities before opening LCs against the coal import.
The cost incurred to import the coal, including transport from port to plant, will ultimately be borne by Bangladesh, with the price factored into the PPA's tariff structure.
Adani Power recently sent a request for BPDB to issue the demand note, where the coal price is quoted at $400 per metric ton (MT) - far above what BPDB officials believe it should be given the present state of the international market.
“In our view, the coal price they have quoted ($400/MT) is excessive - it should be less than $250/MT, which is what we are paying for the imported coal at our other thermal power plants," the official said.
The BPDB official referred to the coal procurement of Rampal Power Plant where the supplier Bashundhara Group won the contract to supply coal at $232.33 per ton to reach the product to the jetty.
The same sources also said Bangladesh’s stance on the issue was communicated to Adani Power officials during the visit of a delegation led by State Minister for Power, Energy and Mineral Resources Nasrul Hamid to the site of the power plant, that took place in the first week of January.
The subsequent letter counts as BPDB’s formal request for the PPA to be reviewed and tariff structure to be adjusted before it can start importing the electricity, officials said.
A number of BPDB officials told UNB it was the absence of a provision for discounts on the purchase of coal in the PPA signed with Adani Power,that allowed the Indian firm to quote such a steep bill for the coal.