Two private power plants have been receiving gas supply from two subsidiaries of the state-owned Petrobangla at public power plant’s rate, but after producing electricity, they are selling it at commercial rate to two export processing zones (EPZs).

According to official sources, these two power plants belong to the United Group, and were set up in 2008 under its commercial venture of United Power Generation and Distribution Company Ltd (UPGDL).

A 86 MW plant was set up for Dhaka EPZ, getting gas from Titas Gas Transmission and Distribution Company, while a 72 MW plant was installed to supply power to Chattogram EPZ, receiving gas from Karnaphuli Gas Distribution Co. Ltd.

Officials of the state-owned Bangladesh Power Development Board (BPDB) alleged that such practice by the United Group is unethical and also contradicts the existing law which does not allow a private establishment to receive gas from Petrobangla at public power plant rate for selling the produced electricity to consumers at a commercial rate.

Interestingly, the United Group sells the electricity on weekends to BPDB as an IPP at the power plant rate when the industries in the two EPZs remain closed.  

Officials said that BPDB has been deprived of Tk 800 crore profit annually due to this. Instead, the United Group is being benefitted. 

They said BPDB has been acting as a single buyer in the power sector which buys electricity from private and public power plants and sells it to distribution companies who then sell the electricity to retail consumers.

Beyond the BPDB, Rural Electrification Board (REB) has also been buying electricity from a few private power plants, selling electricity to retail level consumers through its affiliated Palli Bidyut Samity.

A top official of BPDB informed that after the government raised gas price to Tk 15.75 per unit for power plants and Tk 30 for captive power plants, United Group’s profit margin went up. He explained that under the captive power producer category, United Group is supposed to pay Tk 30.75 for per unit of gas, but is paying Tk 15.75 per unit.

In contrast, it is selling electricity to the Dhaka EPZ and Chattogram EPZ at a commercial rate of about Tk 10.88.

The official also mentioned that if the United Group buys gas at power plant rate, its electricity should be sold at Tk 5.5 per unit to the BPDB, and then BPDB will sell it to a distribution company for the EPZs.

Another official said that BPDB has been supplying electricity to the export processing zones from the very beginning. 

But surprisingly, United Group came to the market facilitated by high-ups in the then government, and managed to have Bangladesh Export Processing Zones Authority (BEPZA) to buy electricity from the group instead of BPDB or any other state-owned distribution company.

The BPDB officials also alleged that BEPZA, as a state-owned entity, has been purchasing electricity without any competitive bidding process which is also a violation of the Public Procurement Act 2006 and Public Procurement Rule 2008.

About the allegations, Hasan Mahmood Raja, who is owner of the United Group and now its advisor, said the group has been doing business with the two EPZs of the BEPZA complying fully with the existing rule.

“Nothing is in violation of the existing government’s law, and BEPZA is purchasing electricity as United Group gives it a guarantee of uninterrupted power supply,” Hasan Mahmood Raja told UNB. 

He, however, admitted that the deal between the BEPZA and the United Group was done without a competitive bidding process.