Corruption Involving Three Power Plant: TIB Study

Transparency International Bangladesh (TIB), in a research study has allegedly found substantive corruption involving three power plants—two coal fired and one LNG-based—in the country.

According to the TIB study presented on Wednesday, the corruption involved at least Tk 390.49 crore which was allegedly grabbed by government officials, local representatives and influential political circles.

Moreover, power tariffs were set at higher rates compared with similar projects which also involved corruption, it said.

The power plants are: PowerChina Consortium’s Barisal 350 MW coal-based power plant, S Alam Group’s Banshkhali 1320 MW SS Power plant and the state-owned Coal Power Generation Company’s Matarbari 600 MW LNG-based power plant.

“We’ve maintained recognized international standards and practices in conducting our research to find out the corruption… We have necessary substantive documents in our hands to prove the allegations”, said Dr Iftekharuzzaman, executive director of the TIB, while briefing reporters virtually during the presentation of the report.

Mahfuzul Haque and Newazul Maula of TIB presented the report titled “Coal and LNG-based Power Projects in Bangladesh: Governance Challenges and Way Out.

Iftekharuzzaman said if any individual or civil society representative can move the court on the basis of the allegations his organization will cooperate.

“TIB will cooperate with such an initiative as per its policy and standard”, he said, adding that the corruption watchdog body will share the study with the government and other agencies.

The TIB said that the land of the projects was purchased by the sponsors of the projects at huge inflated prices to show the higher cost to take financial benefits. Corruption took place in land acquisition as well, it said.

The graft watchdog found that the existing laws and regulations were not properly followed in purchasing lands and also signing the power purchase contracts with the government.

It alleged that the Power and Energy Speedy Supply (Special) Act was used to award the contracts of these power plants to certain companies in order to avert the competitive bidding process despite there being many efficient companies for the projects.

They said the Special Act was extended up to 2026 despite the fact that this law has no necessity to exist at this point of time.

The TIB also found that some scopes were deliberately kept in the power purchase agreements (PPA) signed with the government to further increase the power tariffs of the plants.

Regarding the environmental issues, the TIB said that the department of environment has miserably failed to enforce environmental obligations in implementation of the plants.

It said that the government is not moving towards renewable energy options to generate electricity despite its commitment to increase the green energy’s share to 40 per cent in electricity generation.

It observed that despite the cancellation of the 12 coal-based power plants, the share of coal-based power plants is still one-fourth of the total generation.

It said, there is a lack of commitment on the part of the government to go for renewable energy though its production cost fell by 89%.

The government targeted to generate 10% electricity from renewable sources by 2020. But only 2.3% of power now comes from renewable sources, it added.

The TIB placed 7-point recommendations for the government which include framing an integrated energy and power master plan keeping the focus on renewable energy, cancellation of Power and Energy Speedy Supply (Special) Act 2010 and not allowing any fossils-fuel based projects after 2022, ensuring transparency, accountability in approving and awarding power projects, suspending all coal projects considering environmental risks and taking legal action against the persons involved in the corruption in power projects.

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