The United Group has issued a rejoinder objecting to parts of a UNB report titled: “United Group power plants getting gas at concessional rate, but selling electricity at commercial rate to EPZs”.
We are reproducing the rejoinder in full, with our response below:
“Two private power plants have been receiving gas supply from the two subsidiaries of the state-owned Petrobangla at public power plant’s rate, but after producing electricity, selling it at commercial rate to two export processing zones (EPZs).”
Response:
(a) Exactly same as PDB or REB, no difference. The gas price is determined by the Bangladesh Energy Regulatory Commission (BERC). These two power plants were set up under full compliance of Policy Guidelines for Enhancement of Private Sector Participation, 2008 where these power plants are entitled to IPP license
“Officials of the state-owned Bangladesh Power Development (BPDB) alleged that such a business by the United Group is totally unethical and also contrary to the existing law which does not allow a private firm to receive gas from Petrobangla at power plant rate, but sell the produced electricity to consumers at commercial rate.”
Response:
(a) These two power plants were set up under full compliance Policy Guidelines for Enhancement of Private Sector Participation, 2008 - Not contrary to any law.
(b) These plants sell electricity to the two EPZs at exactly the same rate PDB or REB would do, as determined by Bangladesh Energy Regulatory Commission (BERC)
“Interestingly, the United Group sells the electricity at the weekend to the BPDB as an IPP at the power plant rate when the industries in the two EPZs remain closed.”
Response:
(a) Electricity is sold as per the 2008 policy at a tariff determined by BERC. This tariff is lower than tariff at which PDB sells electricity to its distributors, meaning PDB is earning a profit by buying electricity from these plants
“The BPDB 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 to a distribution company to sell to the EPZs.”
Response:
(a) These two power plants were set up in 2008 when investors in EPZ were recalling investment due to lack of uninterrupted, reliable electricity supply from PDB and REB.
(b) BEPZA’s governing board did not decide to establish dedicated power plants without reason. Decision to set up dedicated power plants were taken for all EPZs. Not just Dhaka and Chattogram EPZ.
(c) Selling price to BEPZA is determined by BERC and Selling price to PDB and REB is determined by BERC. These power plants cannot determine their own commercial tariff.
“The BPDB officials also alleged that the BEPZA, as a state-owned entity, has been purchasing electricity without any competitive bidding process which also a violation of the Public Procurement Act 2006 and Public Procurement Rule 2008.”
Response:
(a) Power plants were procured and electricity purchased under BEPZA Act 1980. In full compliance of laws of Bangladesh and No violation of any government procurement rules.
End of rejoinder.
The rejoinder expands on the statement on behalf of United Group that was contained within the report. UNB stands by its report based on information and allegations from the BPDB.